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bubbleturbo

Euro And Fed Rates Expected To Rise By 0.75 Over Next 12 Months

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http://www.finance-magazine.com/display_ar..._id=6025&node=1

Following the European Central Bank’s recent rate hike of 25 basis points, Ireland’s leading financial services economists are predicting sustained rate rises over the coming year in the euro zone. Moreover, they predict that rates in the US will rise by a similar amount, but that the UK will remain at its present level.

:lol:

I can personally see the US rates getting to around 5% minimum before stopping, as can a few other media commentators I have read in the last week or so.

Things could get interesting

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Noel O’Halloran, chief investment officer with KBC Asset Management and Jim Power, chief economist of Friends First, are more pessimistic on rates, predicting that they will be at 3.25 by 2007. ‘Evidence of strong liquidity growth, very strong property markets emerging around the continent and continuing in economies like Ireland and Spain, and evidence of loan growth picking up strongly’ is sufficient for the ECB to justify their continued gradual raising of rates towards 3.5 per cent sometime in 2007,’ writes O’Halloran.

Sorry Noel and Jim, but when it comes to the ECB setting rates the only things that matter are the economies of Germany and France. The Irish property market is only marginally more important to Jean-Claude Trichet than what colour socks he should wear today.

Many house buyers in Ireland have maxed out on credit with rates at 2%. If they rise to 3.25%, you will almost hear their pips squeak.

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Many house buyers in Ireland have maxed out on credit with rates at 2%. If they rise to 3.25%, you will almost hear their pips squeak

The ECB will only know if their rate tightining policy has worked when they hear the squeaking of pips, much of that squeaking will no doubt be emanating from Ireland.

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I am interested how the UK will keep interest rates the same when faced with rising imported inflation....

Yeah, the only thing that worries me is if the dollar starts depreciating and we are able to hold/cut rates because of the effect it would have on reducing inflation and balance of payments.

If this happens though, the Fed will have to go sky high with US rates and cause recession in the US.

Same end result for global house prices. :lol:

Edited by BubbleTurbo

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The ECB will only know if their rate tightining policy has worked when they hear the squeaking of pips, much of that squeaking will no doubt be emanating from Ireland.

I'm expecting more squealing than squeaking on account of there being so many property piggies over here.

Also the question is will the government manage to squeak by in the next election (May 2007?) or will reality have caught up with the Irish economy by that time ?

The ECB will be making credit more expensive but our "elites" will be fueling the fire by every other means up to that election. The race is on !

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...but our "elites" will be fueling the fire by every other means up to that election. The race is on !

Whilst selling down their property portfolios before it all rolls over. ;)

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Also the question is will the government manage to squeak by in the next election (May 2007?)... [AssetIndigestion]

So that's why the SSIAs are due to mature in 2007.

thats an incredible scheme!!!!! cant imagine the uk gov ever doing it

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thats an incredible scheme!!!!! cant imagine the uk gov ever doing it [moosetea]

SSIAs were one of several measures introduced in an attempt to control inflation after the loss of control over monetary policy. Joining the Euro has been an absolute catastrophe for the Irish economy.3

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The word on the street is that many people in the ‘business’ are divesting themselves of Irish ‘investment’ properties.

I expect that the ECB will cop a heap of flack in Ireland when the economy goes pop! but maybe (okay unquestionably) we as a nation lack that Teutonic forbearance witnessed in Germany. I guess that the ECB has to protect the principle European economy and our little fiscal dumping, cabal ridden speculative septic isle is collateral damage waiting to happen as far as the Bundersbank is concerned.

But at least we can look back at this decade and reflect on the crowing glory of the Irish property mania, Mullingar is quicker to get to than a decade ago.

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The problem with reducing rates in the UK, as has been proved in recent years, is that the UK populatation simply sees it as a sign to spend, spend, spend, to max out on credit, to buy more and more houses and then to MEW.

There is no common sense when UK IRs are lowered. People do not appear to take advantage of the low IRs to pay off debt. They simply get more and more debt.

If UK IRs were to go down then all that will happen is that the credit bubble will get much bigger, that the bursting of the bubble will take much longer and that the resulting pain will be much more painful. It is nuts!

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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