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Eurozone 3% Usa 5.5% Ir By End Of Year

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Eurozone rates 'to hit 3pc by year-end'

Brendan

Keenan

INTEREST rates will rise faster this year than most people expect, reaching 3pc in the eurozone and 5.5pc in the USA by end-year, Marc Chandler, currency strategist with New York investment bank Brown Brothers Harriman, said on a visit to Dublin yesterday.

His comments came as ECB president Jean-Claude Trichet more or less confirmed a rise in interest rates next month and signalled further moves in the months ahead.

"When I look at forecasts made by markets as far as future movements are concerned, they are perfectly sensible," Mr Trichet said. Inflation risks are firmly to the upside in a steadily expanding economy, and the ECB must be vigilant in ensuring that price expectations remain stable, given high energy costs, he told a European Parliament committee.

Mr Chandler said he expects the ECB to continue sounding hawkish even after a rate rise next month. "The US should have very strong first-quarter annual growth of 4.5pc. That will slow to 3-3.5pc, but that will still be good news for the exporters from the eurozone and other regions," Mr Chandler said.

Mr Trichet gave no guidance on the timing or pace of rate hikes after March, beyond endorsing the direction. But he left no doubt that the ECB considers monetary conditions too loose for an economy where recovery is expected to gradually strengthen and broaden.

The ECB chief dismissed the drop in fourth-quarter eurozone growth to 0.3pc, half its prior-quarter pace, as "short-term volatility". "Our assessment continues to reflect a strengthening of economic activity

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Eurozone rates 'to hit 3pc by year-end'

Brendan

Keenan

INTEREST rates will rise faster this year than most people expect, reaching 3pc in the eurozone and 5.5pc in the USA by end-year, Marc Chandler, currency strategist with New York investment bank Brown Brothers Harriman, said on a visit to Dublin yesterday.

His comments came as ECB president Jean-Claude Trichet more or less confirmed a rise in interest rates next month and signalled further moves in the months ahead.

"When I look at forecasts made by markets as far as future movements are concerned, they are perfectly sensible," Mr Trichet said. Inflation risks are firmly to the upside in a steadily expanding economy, and the ECB must be vigilant in ensuring that price expectations remain stable, given high energy costs, he told a European Parliament committee.

Mr Chandler said he expects the ECB to continue sounding hawkish even after a rate rise next month. "The US should have very strong first-quarter annual growth of 4.5pc. That will slow to 3-3.5pc, but that will still be good news for the exporters from the eurozone and other regions," Mr Chandler said.

Mr Trichet gave no guidance on the timing or pace of rate hikes after March, beyond endorsing the direction. But he left no doubt that the ECB considers monetary conditions too loose for an economy where recovery is expected to gradually strengthen and broaden.

The ECB chief dismissed the drop in fourth-quarter eurozone growth to 0.3pc, half its prior-quarter pace, as "short-term volatility". "Our assessment continues to reflect a strengthening of economic activity

Can you imagine what a ECB rate of say 5% would do in Ireland... or 6% ... or 7%... bye bye Celtic Tiger...

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Can you imagine what a ECB rate of say 5% would do in Ireland... or 6% ... or 7%... bye bye Celtic Tiger...

The really funny thing is that the people in power in Europe will not give a to55 about Ireland and some of them probably don't even know where it is.

If rates have to go up to these sort of levels, they will do and the Irish will have no say in the matter whatsoever.

:lol::lol::lol:

Edited by BubbleTurbo

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Can you imagine what a ECB rate of say 5% would do in Ireland... or 6% ... or 7%... bye bye Celtic Tiger...

Agreed. And when it is all over what will be the Tiger's legacy? - Copious helpings of cold turkey for the masses of debt junkies.

I can only think of one real home-grown corporate success story to come out all this, just one that has really imposed itself on the international stage, and has the foundations to see it through boom and bust - and that's Ryanair. I'm struggling to think of any others. Celtic Tiger - my ar5e.

Edited by Flash

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Can you imagine what a ECB rate of say 5% would do in Ireland... or 6% ... or 7%... bye bye Celtic Tiger...

4 interest rate rises within 12 months adds 320 euro a month onto the average mortgage.Incomes need to increase by 600 euro a month to afford this.

And there are people queueing up to buy off-plan :o

2007 Armageddon

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US may well push rates over 5% as news today shows a very healthy US economy and inflationary worries:

http://biz.yahoo.com/ap/060221/wall_street.html?.v=10

The economic indicator reading was almost twice as high as economists expected
, providing one more sign that "there's growth still there in the economy and the Fed's going to have to do its magic by
continuing to raise interest rates
," said Kim Caughey, equity research analyst, Fort Pitt Capital Group, in Pittsburgh.

We are definitely moving into a new economic cycle where substantially higher IR will be the norm. INterest rate sensitive housing markets will clearly be in for a rough ride in the months ahead.

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We are definitely moving into a new economic cycle where substantially higher IR will be the norm. INterest rate sensitive housing markets will clearly be in for a rough ride in the months ahead.

House prices are a matter of opinion. Debt can be written off.

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Can you imagine what a ECB rate of say 5% would do in Ireland... or 6% ... or 7%... bye bye Celtic Tiger...

The thing is that the GDP is so much larger than the GNP in Ireland as foreign countries with an interest in Ireland report hefty revenues & profits in their Irish subsiduaries in order to benefit from the favourable tax treatment... The Celtic Tiger's not all it's made out to be....

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We are definitely moving into a new economic cycle where substantially higher IR will be the norm. INterest rate sensitive housing markets will clearly be in for a rough ride in the months ahead.

Good time to buy with a 10 year fix then?

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Good time to buy with a 10 year fix then?

With house prices at or near the top of the economic cycle I would say the signs are pointing to a "sell" for houses. The market is not sending out any "buy" signals that I can see. The UK market is extremely interest sensitive due to the high volume of IO loans and massive income multiples that have created too many non-equity situations. A slight rise in IR or a small fall in prices and negative equity becomes the nightmare come true. In conclusion, IMHO now must be the worst possible time to buy.

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With house prices at or near the top of the economic cycle I would say the signs are pointing to a "sell" for houses. The market is not sending out any "buy" signals that I can see. The UK market is extremely interest sensitive due to the high volume of IO loans and massive income multiples that have created too many non-equity situations. A slight rise in IR or a small fall in prices and negative equity becomes the nightmare come true. In conclusion, IMHO now must be the worst possible time to buy.

I've tried to explain this to a work collegue who's about to buy a house in Manchester - he can't wait another year or two

Another work collegue is encoraging him by explaining that his, potential, house purchase is rising in value everyday

They make me laugh...

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  • 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%



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