Jump to content
House Price Crash Forum
Samuel Whiskers

Mpc Rate Decision

Recommended Posts

quality...

Did you wonder why the high street had a good week with massive sales and now is worse..

yet we are told different.

They are not dropping rates becasue everything is great now.. they can't drop them..

and will have to raise them when the external economic push gives us a yank with the eu and us higher rates.

still, worse ever trade defficit this month..

of course.. that's england looking fabulous..

Europe slapping brown's wrists over the debt levels..

All of the things that were bad before.. they are still there..

Nothing has improved.

Share this post


Link to post
Share on other sites

The BBC are as usual reporting a cut as good as a rise as bad.

Talking about "hopes of a rate cut" and "leaving the door open for a rate cut", and business leaders being "dissappinted" about there not being a rate cut.

Rate rise bad, rate cut good!

Cheap houses bad, expensive houses good!

Two legs bad, four legs good!

Share this post


Link to post
Share on other sites

The BBC are as usual reporting a cut as good as a rise as bad.

Talking about "hopes of a rate cut" and "leaving the door open for a rate cut", and business leaders being "dissappinted" about there not being a rate cut.

Rate rise bad, rate cut good!

Cheap houses bad, expensive houses good!

Two legs bad, four legs good!

they're only reflecting the concerns of the society that they supposedly represent. A sick, usurious society with an unhealthy reliance on circulating assets in exchange for a share of notional future earnings that rely on very optimistic assumptions.

Or something.

On a brighter note, I'm amazed by how little attention this has generated on here. Mind you, it is a generally quiet day.

Share this post


Link to post
Share on other sites

I find it very interesting that they did not drop rates.

The siren calls have been loud and consistent for a while now. Inflation is contained, consumer confidence is low, retailers are in trouble, TUC calling for a cut etc etc and, oddly, the pound is a bit better against the dollar than recently and still THEY DID NOT CUT.

That speaks volumes to me. I think they know what is coming next and realise that a rate cut will simply fan the flames. They are hoping that a steady hand on the tiller will put of the forthcoming, inevitable, rate rises as long as possible.

Share this post


Link to post
Share on other sites

The BBC are as usual reporting a cut as good as a rise as bad.

Talking about "hopes of a rate cut" and "leaving the door open for a rate cut", and business leaders being "dissappinted" about there not being a rate cut.

Rate rise bad, rate cut good!

Cheap houses bad, expensive houses good!

Two legs bad, four legs good!

I think most businesses in the UK would see an Interest Rate Cut as "good". The UK base rate is twice that of the EU who are our main competitiors and also our main market. High Interest Rates (relative) make it harder for British companies to compete internationally. Personally I also see an interest rae cut as good. It helps my business by lowering the cost of our finance and by potentially increasing the disposable income of our clients (resulting in more orders).

However, I know this goes against the matra of this web-site and forum that desires massive house price falls no matter what the cost to the country (or indeed to other people). I get the feeling that most pundits on this forum would rather have a great depression with millions of people destitute and living on hand-outs than have a soft landing for British House prices.

Share this post


Link to post
Share on other sites
Personally I also see an interest rae cut as good.

I presume you also think that the consequent high inflation is good? It's taken a whole generation for people to forget that high inflation is far worse than high interest rates... and after this boom crashes it will take another generation to forget it again.

Quite frankly, any company which is so close to bankruptcy that it can't handle 4.25% interest rates should go bust to clear the dross out of the economy.

Share this post


Link to post
Share on other sites

I find it very interesting that they did not drop rates.

The siren calls have been loud and consistent for a while now. Inflation is contained, consumer confidence is low, retailers are in trouble, TUC calling for a cut etc etc and, oddly, the pound is a bit better against the dollar than recently and still THEY DID NOT CUT.

That speaks volumes to me. I think they know what is coming next and realise that a rate cut will simply fan the flames. They are hoping that a steady hand on the tiller will put of the forthcoming, inevitable, rate rises as long as possible.

I agree. The next move is UP, and that will be confirmed by the minutes later this month (two weeks time). I wouldn't be suprised if a couple are getting nervous and opting for a rise.

Share this post


Link to post
Share on other sites

I think most businesses in the UK would see an Interest Rate Cut as "good". The UK base rate is twice that of the EU who are our main competitiors and also our main market. High Interest Rates (relative) make it harder for British companies to compete internationally. Personally I also see an interest rae cut as good. It helps my business by lowering the cost of our finance and by potentially increasing the disposable income of our clients (resulting in more orders).

However, I know this goes against the matra of this web-site and forum that desires massive house price falls no matter what the cost to the country (or indeed to other people). I get the feeling that most pundits on this forum would rather have a great depression with millions of people destitute and living on hand-outs than have a soft landing for British House prices.

Low interest rates are good for business, of course. The advantage on the Continent is that the population is more mature than the British and they are in the habit of saving and spending within their means. This means business can have low interest rates and yet the economies don't blow up in binges of consumer credit spending followed by bust. You can't really blame the reactions of the MPC for the faults of the childish British consumers who refuse to live within their means.

You'd think that the government would recognise the long-term harm done to business by consumer behaviour, but they aren't strong enough. I suppose the finance sector makes too much money from dishing out loans to the suckers. Also, debt keeps the population peaceful.

Share this post


Link to post
Share on other sites

I think most businesses in the UK would see an Interest Rate Cut as "good". The UK base rate is twice that of the EU who are our main competitiors and also our main market. High Interest Rates (relative) make it harder for British companies to compete internationally. Personally I also see an interest rae cut as good. It helps my business by lowering the cost of our finance and by potentially increasing the disposable income of our clients (resulting in more orders).

However, I know this goes against the matra of this web-site and forum that desires massive house price falls no matter what the cost to the country (or indeed to other people). I get the feeling that most pundits on this forum would rather have a great depression with millions of people destitute and living on hand-outs than have a soft landing for British House prices.

Oooh lets see the average joe would be say £50 a month better off, that is soon wiped out by rises utility bills, council tax, petrol etc (all of these have gone UP since the last rate cut).

Imagine how much more money your average joe would have to spend at your business if they were servicing a £50k mortgage for their 3-bed instead of a £100k one (house prices doubled hence mortgage amounts have to at least double). Even if IR's were at 0.1% the repayments for the £100k mortgage would be MORE than the repayments on the £50k with IR's at 5%.

So you could argue that the lower interest rates in the past that helped fuel the property boom have actually damaged your business in the long term.

I'll leave any other conclusions up to you.

Share this post


Link to post
Share on other sites
Low interest rates are good for business, of course.

Not neccesarily true. Low interest rates mean more marginal businesses can continue to operate on borrowed money, which means more competition, which means lower prices and lower profit margins. Unless the low rates allow people to borrow more money to buy your products, viable businesses would be better off with higher rates... and non-viable businesses are... non-viable.

Share this post


Link to post
Share on other sites

I think most businesses in the UK would see an Interest Rate Cut as "good". The UK base rate is twice that of the EU who are our main competitiors and also our main market. High Interest Rates (relative) make it harder for British companies to compete internationally. Personally I also see an interest rae cut as good. It helps my business by lowering the cost of our finance and by potentially increasing the disposable income of our clients (resulting in more orders).

However, I know this goes against the matra of this web-site and forum that desires massive house price falls no matter what the cost to the country (or indeed to other people). I get the feeling that most pundits on this forum would rather have a great depression with millions of people destitute and living on hand-outs than have a soft landing for British House prices.

Whilst I think your views are welcome and are probably true I think that you are missing one thing out. DEBT and the debt maontain are a bigger threat to our economay than rates imho. We need to desuade people from debt and get some 'REAL' money in peoples pockets to put back into the economy.

My personal view is, up interest rates and lets drive the HPI back to sensible levels. People would think twice about offering or taking a loan. EG. House is up for £120K and I am first time buyer. I think, at 3.5% thats only XXX per month I can afford that. If it was at 6% I would say, hmm thats xxxxxx per month. I think I am being too ambitious, I need to look at something cheaper. With this methodology the houses would have to drop to what the masses can afford. When you have cheap lending the same scenario is, £100K thats only £450 a month - I have £600 so lets go for that £170K house. It's only a little later when IR rise that he realises what a MASSIVE amount of meny he has borrowed. We need to STOP people doing this.

I dont want a recession, I dont want gloom (apart from EA's who can all go forth!) but they continue to RAMP the market. If they carry on fueling this bubble then we are in trouble. Whilst people are being offered these high loans there is little chance of a slowdown. We need tightening of credit so when the EA asks £200K - no one will respond and they have to drop it to a more realistic level.

If you live by the sword, you die by the sword.

KNOCK 25% of all houses - all but last chain and investors will be better off. The average man/woman will have more cash in their pockets to spend on the high street. Businesses will grow as sales of their products will increase and the economy will run better.

AS it stands FUELS, TAXES , DEBT and HOUSEPRICES are squeezing everyone so the whole economy is stagnant. This can be resolved if it wasnt for PURE GREED.

I expect many MAJOR companies to go under this year, maybe then people will wake up and smell the coffee. (Lets hope its a housebuilder or EA!)

TB

Share this post


Link to post
Share on other sites

AS it stands FUELS, TAXES , DEBT and HOUSEPRICES are squeezing everyone so the whole economy is stagnant. This can be resolved if it wasnt for PURE GREED.

I expect many MAJOR companies to go under this year, maybe then people will wake up and smell the coffee. (Lets hope its a housebuilder or EA!)

TB

When major companies do go under there will be screams for rate cuts so that other poor companies can be kept afloat by feeding their shareholders with further comsumer debt.

Share this post


Link to post
Share on other sites

I presume you also think that the consequent high inflation is good? It's taken a whole generation for people to forget that high inflation is far worse than high interest rates... and after this boom crashes it will take another generation to forget it again.

Quite frankly, any company which is so close to bankruptcy that it can't handle 4.25% interest rates should go bust to clear the dross out of the economy.

Although I'll be considered a heretic for saying so, some level of Inflation is actually a benefit for many businesses (esp. manufacturing type businesses buying plant and machinery etc as (in)famously stated by James Dyson). However I do agree that persistently high Inflation is not good for the economy or for businesses athough I don't think it can be claimed that Inflation is dangerously high at this current time.

I don't think a 0.25% cut will do anything to save failing businesses eitther but that wasn't the point of my posting. Base Rates in the UK are double that of the EU, a 0.25% cut is a relatively small movement to reduce this inequality but as far as businesses are concerned it would be beneficial and a step in the right direction.

By your logic Base Rates should be raised untill all of the "dross" is cleared out of the economy. Perhaps a Base Rate of 20% would be good so only the very best Businesses could survive. They could then create domestic monopolies and the UK would then be a perfect place with perfect Companies offering perfect Products to perfect Consumers.

Share this post


Link to post
Share on other sites

Oooh lets see the average joe would be say £50 a month better off, that is soon wiped out by rises utility bills, council tax, petrol etc (all of these have gone UP since the last rate cut).

Imagine how much more money your average joe would have to spend at your business if they were servicing a £50k mortgage for their 3-bed instead of a £100k one (house prices doubled hence mortgage amounts have to at least double). Even if IR's were at 0.1% the repayments for the £100k mortgage would be MORE than the repayments on the £50k with IR's at 5%.

So you could argue that the lower interest rates in the past that helped fuel the property boom have actually damaged your business in the long term.

I'll leave any other conclusions up to you.

Again I think you have missed the point of my post. I am not concerned about the level of Interest rates per se I am concerned about the level of interest rates COMPARED to our economic rivals in the EU. It is not a question of Low or High but rather it is a question of "Lower than" or Higher than" and at the moment the UK is considerably higher than the EU.

I agree if the average Consumer had less debt or more disposable income then they would have more money to spend at businesses like mine this seems very obvious. But you appear to be saying that you want IRs to go up to a point where businesses fail, people go bankrupt by the million and the economy goes into recession for years simply so you can buy your dream house.

Share this post


Link to post
Share on other sites
Businesses don't have a problem with 4.5%

Consumers have a problem with 4.5%.

Then why are businesses whining about 'high' interest rates? If your customers can't afford your products at historically low rates, then you're in the wrong business.

Share this post


Link to post
Share on other sites

...people go bankrupt by the million and the economy goes into recession for years simply so you can buy your dream house.

If people go bankrupt through a combination of over-mortgaging and IRs going up by a couple of percent then they probably deserve it.

Share this post


Link to post
Share on other sites
Guest

Then why are businesses whining about 'high' interest rates? If your customers can't afford your products at historically low rates, then you're in the wrong business.

Crossed wires, Mark. I was being a smart-****. I see businesses as whingers.

Of course the customers can't afford the products, but not necessarily because a given business is wrong per se, just because customers have borrowed too much lately.

B&Q isn't a "wrong" business. What would B&Q have done if rates had been lowered to 2.5% say? Borrowed to finance opening fifty more stores? Nothing they can do if people aren't buying, time to close 22.

This is why I see businesses (particularly retailers) as whingers. It's tough. Lower rates and more consumer debt won't help.

If anyone should be clamouring for lower rates, it's the ones with the debt itself.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.