Crashing pound, do they raise interest rates

[longtomsilver]

15 minutes ago, knock out johnny said:

What's the product/sector?

Quite broad - big box items not consumer electronics or perishables. 

[ccc]

I remember when the £ was over 2 back in the day. I used to go into boozers and get a bottle of Bud for 39p !! Amazing.

I also bought a DODGE Viper for £34.89. Fantastic value !!

Its opportunism if any manafacturer puts prices up now. Its 2 months. That's nothing. Now after 2 years ? Fair enough.

But what you won't see - is if the £ goes back up again in the next few years - the prices of all these goods that have been pushed up suddenly dropping like a stone.

Surely the posters on this site are aware of this and how big companies take advantage of every opportunity they can......

[Will!]

On 04/10/2016 at 3:02 PM, Crumbless said:

With the pound crashing, at what point do they raise interest rates.

1.2, 1.1 ........ or lower.

The lesson of Black Wednesday is that once the rout is on, nothing works.  Norman Lamont clearly dislikes Carney and I'm sure Carney would like to point out at a House of Lords Economic Affairs Committee meeting that he didn't repeat Lamont's mistakes. 

[Errol]

If they raise rates to 18%, that would work.

[BobbyZZZ]

This just landed in my in box... Very interesting.......................................

 

PropertyBrain Friday Roundup 07/10/16: Pound gets pounded

A succinct weekly take on the London property market and a roundup of headlines from market observer John Lim.

• The pound made headlines after plunging 6% in two minutes this morning, before quickly recovering most of its losses within half an hour.

• The two-minute flash crash coincided with a story on the Financial Times about French president Francois Hollande taking a tough stance on Brexit. Some have attributed the crash to a computerised chain reaction, while others have blamed a “fat finger” error by a trader.

• The pound is now officially the worst-performing major currency in 2016, down 14pc since the start of June, the month of the Brexit vote. Taking a longer-term view, it has fallen 36pc over the past decade, pointing to a fundamental revaluation rather than just a temporary shock.

• Many have attributed the current pressure on the pound to Theresa May’s speech at the Conservative party’s annual conference, which dropped several hints that she was ready to surrender membership of the single market in return for more power over immigration, law-making and the budget – a “hard Brexit”.

• The pound also weakened earlier in the week when May stated during a BBC interview that she looked to trigger Article 50 by March next year, which set a firm deadline and dashed the hopes of some for a “wishy-washy” process.

• Looking across the other side of the table, EU President Donald Tusk has adopted a neutral position, saying that negotiations would only begin once Article 50 is triggered.

• Going forward, we should expect more aggressive posturing from the likes of Germany and France. The UK will set a precedent for other countries considering leaving the EU, and an easy exit would threaten the EU’s very existence.

• How will this affect the currency in the short-term? Many expect more volatility as negotiations continue, for example, Goldman Sachs predicts another 5pc fall in the pound against the dollar, taking sterling to $1.20. 

HEADLINES

Here’s a roundup of what we think are the big news stories this week:

• Sadiq Khan is to launch a comprehensive inquiry into the impact of foreign investment in London’s housing market over concerns of foreign investors distorting the housing market.

• The amount of stamp duty collected on house sales in London rose by £340m in 2015-16, according to HMRC data.

• The Royal Institute of Chartered Surveyors reports that 86% of landlords say they have no plans to increase rental portfolio this year, and predicts a critical rental shortage through to 2025.

• The Telegraph reports that overseas investors, attracted by the fallen sterling, accounted for 78pc of commercial property bought in Central London over last three months.

• Chancellor Philip Hammond has pledged to borrow £2bn and ease some planning paths to boost housebuilding.

• Investment in London property fell by 36% over the 12 months to June, despite global property investment rising 0.5% in the same period, according to Cushman & Wakefield

And finally…

• A three-bedroom flat in Maida Vale for sale has gained online notoriety after the ad was posted on online community Reddit, with users mocking its tiny dining room:

                       

[Democorruptcy]

No chance of rates rising. The BoE are positioning themselves to ignore the coming inflation:

The Bank of England is going to stop relying on data to make decisions

The Bank of England is going to rely less heavily on economic data when making interest rate decisions in the future, according to the bank's deputy governor for monetary policy, Ben Broadbent.

https://uk.finance.yahoo.com/news/bank-england-going-stop-relying-082920509.html

 

 

[SpectrumFX]

7 minutes ago, Democorruptcy said:

No chance of rates rising. The BoE are positioning themselves to ignore the coming inflation:

The Bank of England is going to stop relying on data to make decisions

The Bank of England is going to rely less heavily on economic data when making interest rate decisions in the future, according to the bank's deputy governor for monetary policy, Ben Broadbent.

https://uk.finance.yahoo.com/news/bank-england-going-stop-relying-082920509.html

 

 

[DrMartinSanchez]

17 minutes ago, Democorruptcy said:

The Bank of England is going to stop relying on data to make decisions

 

Did the Daily Mash acquire Yahoo? When did that happen?

[copydude]

That's got to be the Daily Mash, surely? Or he's 'avin a laugh . . .

[Futuroid]

7 minutes ago, DrMartinSanchez said:

Did the Daily Mash acquire Yahoo? When did that happen?

"Data"... pah! Put it in the bin with the "experts".

Let's go with gut feel and wild optimism. It's been good for Brexit so far (value of GBP excepted). 

[hi5lo5]

https://www.ft.com/content/dc1c09ac-8bba-11e6-8cb7-e7ada1d123b1

Hammond and Carney quell talk of monetary policy split

Chancellor and governor play down suggestion of tension between government and Bank of England

[Futuroid]

27 minutes ago, BobbyZZZ said:

The pound is now officially the worst-performing major currency in 2016, down 14pc since the start of June, the month of the Brexit vote. Taking a longer-term view, it has fallen 36pc over the past decade, pointing to a fundamental revaluation rather than just a temporary shock.

So maybe UK property hasn't been rising as much as we thought.

What was happening is the "pound in your pocket" (and your deposit account) was sliding in value by over a third. Shame wages haven't kept pace. You can count on the Tories to help the workers raise their wages though ;-)

[longtomsilver]

23 minutes ago, Futuroid said:

So maybe UK property hasn't been rising as much as we thought.

What was happening is the "pound in your pocket" (and your deposit account) was sliding in value by over a third. Shame wages haven't kept pace. You can count on the Tories to help the workers raise their wages though ;-)

MrLTS hasn't been at her company long but the board have only just hiked their pay 20% (the real rate of inflation going through at the moment, it'll be interesting to see how TPTB cook the RPI figures) while they can put it through [get away with]. I fully expect wages to increase at a similar level across the ranks but won't hold my breadth. 

Pivotal times indeed.

#genieoutthebottle

[Errol]

1 hour ago, Democorruptcy said:

No chance of rates rising. The BoE are positioning themselves to ignore the coming inflation:

The Bank of England is going to stop relying on data to make decisions

The Bank of England is going to rely less heavily on economic data when making interest rate decisions in the future, according to the bank's deputy governor for monetary policy, Ben Broadbent.

https://uk.finance.yahoo.com/news/bank-england-going-stop-relying-082920509.html

Is this from Private Eye?

Edited October 7, 2016 by Errol

[copydude]

It depends where you pick your highs and lows and against which currencies. Four or five years ago it was at parity with the Euro. Last year it was 1.4. I can remember it being fairly worthless a few times against things like Francs and Dmarks.

This is largely the nonsense of the casino . . . plus pressure over Brexit. The UK is hardly the worst performing economy of 2016.

[Futuroid]

6 minutes ago, copydude said:

This is largely the nonsense of the casino . . . plus pressure over Brexit. The UK is hardly the worst performing economy of 2016.

I take your point but 2016 ain't over yet!

[Gigantic Purple Slug]

17 minutes ago, copydude said:

It depends where you pick your highs and lows and against which currencies. Four or five years ago it was at parity with the Euro. Last year it was 1.4. I can remember it being fairly worthless a few times against things like Francs and Dmarks.

This is largely the nonsense of the casino . . . plus pressure over Brexit. The UK is hardly the worst performing economy of 2016.

 

I think that the point that most people have missed in the fog of Brexit is that the UK was running a massive current account deficit that was almost certainly going to be brought under control at some point in the future by a sterling crisis. It's not a casino. The underlying trends say otherwise.

Brexit may have helped precipitate the crisis, but a significant currency correction was pretty much baked in long before the vote occurred.

[Will!]

9 minutes ago, Gigantic Purple Slug said:

Brexit may have helped precipitate the crisis, but a significant currency correction was pretty much baked in long before the vote occurred.

This.  Brexit is exposing all the cracks in our economy that the government has been papering over and we've been complaining about on here for so long. 

[copydude]

3 minutes ago, Will! said:

This.  Brexit is exposing all the cracks in our economy that the government has been papering over and we've been complaining about on here for so long. 

Only because it is unwelcome to many. One less contributor to support the basket cases bankrupted by the single currency.

'Underlying trends'. Really? The markets respond to any straw in the wind like a teenager on crack. Notice how Deutsche Bank's shares rose 12% last Friday on an entirely false piece of info posted on Twitter.

[GreenDevil]

21 minutes ago, Will! said:

This.  Brexit is exposing all the cracks in our economy that the government has been papering over and we've been complaining about on here for so long. 

Brexit is allowing more loose monetary policy. Which is enabling the banksters to dump the currency and make billions.

Nothing changed we are still in the EU. Accept somne bankster scum sees an opp for a huge profit. 

Let the plebs pay for it with inflation. Such is the free market! As usual it ends with the banker scum.

[dgul]

Something in the FT.

http://ftalphaville.ft.com/2016/10/07/2176896/why-this-more-than-a-flash-crash-in-sterling/

Essentially the guy sees £$ parity as consistent with the UK's deficits.

[dgul]

Apparently a big fund was broken with the £ moves last night (not sure if cause or effect). Not sure of what the full effects are (there's supposedly been some sort of support going on - don't know what* and by whom*).   (Apparently BIS is now involved - don't know details*)

I suppose we'll find out eventually.

[* don't know much really, do I...]

Edited October 7, 2016 by dgul
fast moving world isn't it...

[Gigantic Purple Slug]

20 minutes ago, dgul said:

Something in the FT.

http://ftalphaville.ft.com/2016/10/07/2176896/why-this-more-than-a-flash-crash-in-sterling/

Essentially the guy sees £$ parity as consistent with the UK's deficits.

Some of the big hitters on here (eg RK IIRC) were predicting/pointing out this a long time ago. Bother to listen and you'd be quids in now.

Trading the volatility is the road to ruin. You can make up any old excuse why stuff happens. Fundamentals normally don't lie, if you can hold out long enough for them to come into play. And let's face it that can be a long time.

[The Masked Tulip]

Someone just dumped 2 billion sterling.

[DrMartinSanchez]

Currently on BBC news front page:

Hammond urges calm over pound flash crash

http://www.bbc.co.uk/news/business-37587085