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£ Getting Twatted Today

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Hmm. twit the Pound. Like it :D

It'll be a hold I would have thought. Merv has to herd the muppets. Slowly, slowly, catchee monkey. My guess will be that rates won't move upwards again untill they can't possibly hold out any longer. May bunch things into a series of rises which would be nice.

Edited by George Mainwaring

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Sterling slumping to a several-year low today against the $ and some other currencies. IR cut? Dream on.

http://newsvote.bbc.co.uk/1/shared/fds/hi/...12/intraday.stm

77%20X_SGBPUSD%20bbc-big_thick-line%20intraday.png

Fed seen likely to raise rates instead! US economy still overheating?

The president of the St Louis Federal Reserve, raised rate expectations when he warned that the national Fed will have to “step a little harder on the brake” if data in the coming months is consistently strong.

With a “great deal of momentum” still in the economy, “you’re not going to stop this freight train easily,” Mr Poole added, as he suggested it was better for the Fed to tighten and then reverse course later if needed, rather than take risks with inflation.

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Hmm. twit the Pound. Like it :D

It'll be a hold I would have thought. Merv has to herd the muppets. Slowly, slowly, catchee monkey. My guess will be that rates won't move upwards again untill they can't possibly hold out any longer. May bunch things into a series of rises which would be nice.

That'd be my expectation too.

Hold it until you can't hold it anymore.

Then they will have to either rise quickly (more than 25bp at a time) or steadily at 25bp each month for a while.

I would not be surprised to see 6%+ by end of 2007, but when does it begin?

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That'd be my expectation too.

Hold it until you can't hold it anymore.

Then they will have to either rise quickly (more than 25bp at a time) or steadily at 25bp each month for a while.

I would not be surprised to see 6%+ by end of 2007, but when does it begin?

They will try to get Gordon into number 10 first and then find a stooge to try to clear up his mess. IMHO Gordon won't make it because the brown stuff is already flitting around the room having started to pass through the fan.

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Pound Vs Dollar

I see there has been a bit of a rally, though falling back again. Looks like they're tring their best to protect the £.

Ive seen this happen before, when pound its taking a hit, usually just after 2pm. I guess it's something to do with US markets opening?

Does anyone know why these small rallies happen at this time of day?

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so which way does everyone think rates are going?

I think they may well hold again

Regardless of what happens at the next mad hatters teaparty (BoE meeting). Interest rates are heading to 10%. There are too many infationary factors in the world, and even 10% may be too low.

I know what that means to current mortgages owners, but that is the way of the world. Only 10 years ago, 2% interest rates seemed like an impossibility.

1.70 is key support for sterling. It's a multi-year low. Batton down the hatches if she goes below 1.70 the going's going to rough!

Edited by Pluto

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Regardless of what happens at the next mad hatters teaparty (BoE meeting). Interest rates are heading to 10%. There are too many infationary factors in the world, and even 10% may be too low.

You are Bruno Powroznik and I claim my £5.

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Regardless of what happens at the next mad hatters teaparty (BoE meeting). Interest rates are heading to 10%. There are too many infationary factors in the world, and even 10% may be too low.

I know what that means to current mortgages owners, but that is the way of the world. Only 10 years ago, 2% interest rates seemed like an impossibility.

1.70 is key support for sterling. It's a multi-year low. Batton down the hatches if she goes below 1.70 the going's going to rough!

The irony of a cartoon dog called pluto giving such gloomy economic forecasts made me smile. That being said; I'm not disagreeing with you.

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Guest Charlie The Tramp
I know what that means to current mortgages owners, but that is the way of the world. Only 10 years ago, 2% interest rates seemed like an impossibility.

On a 200k IO mortgage the repayments are £833 at 5%, at 10% they double to £1,666 per month.

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1.70 is key support for sterling. It's a multi-year low. Batton down the hatches if she goes below 1.70 the going's going to rough!

If USD:GBP drops below 1.70 the BoE will have to rush in with a few IR increases to support Stirling.

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On a 200k IO mortgage the repayments are £833 at 5%, at 10% they double to £1,666 per month.

Oooooh nasty. :blink:

Now i know a lot of people who take the view, "But the Govt/BoE couldn't let it get that bad. It would hurt the economy too much."

Big problem is, there might not be too much they can do about.

To quote Yazz: "The only way is up." :lol:

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To quote Yazz: "The only way is up." :lol:

Yes and the UK consumers have been the "Plastic Population" :lol:

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Gilt yields seem to be edging up too. Now at 4.4% ish. The rate rise pressure is building on the BOE and the markets know it.

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MERV KING HAS ALWAYS SAID THE BOE WILL BE PROACTIVE NOT REACTIVE, SO WE SHALL SEE WHAT HAPPENS THIS THURS AND OVER THE NEXT 5 WEEKS

Any chance of a .25% increase this week? Sterling down to almost 1.735 today. My bet is some hawkish comment coming from Merv followed by some tightening action at next meeting. By that time sterlig should have broken down below 1.70 barring any disasters in the US.

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Any chance of a .25% increase this week? Sterling down to almost 1.735 today. My bet is some hawkish comment coming from Merv followed by some tightening action at next meeting. By that time sterlig should have broken down below 1.70 barring any disasters in the US.

1.70 has been major support for sterling. Better hurry up and get that vacation to Disneyworld in before it gets too expensive. I'll see you there!

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Guest Guy_Montag

why should the BoE not let the bottom fall out the £?

I remember, not that long ago, it was $1.5=£1, why should they care if it drops to that again, or $1.4, $1.3 or $0.5?

I know it's not good for my foreign hols, but why will they not let us drop?

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why should the BoE not let the bottom fall out the £?

I remember, not that long ago, it was $1.5=£1, why should they care if it drops to that again, or $1.4, $1.3 or $0.5?

I know it's not good for my foreign hols, but why will they not let us drop?

Because the UK is a net importer and the majority of imports are priced in USD.

So when the GBP drops the cost of those imports goes up. This causes inflation to go up.

It is the BoE's job to keep inflation around 2%. If it goes above 2% the only thing the BoE can do to try and bring it down is to raise interest rates.

Edited by King Of Fools

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In two words - imported goods.

Once existing inventories and fixed price orders are completed and sold down, importers generally have to pass on increases in their cost, i.e. buying using £ that is worth less, to the end costumer by - you guessed it charging more in the devalued currency.

Since UK now manufactures less of the low end consumer garbage, inflation on all those imported goods prices would end up in higher interest rates, and thus a strengthening pound. All things being equal.

Of course inflation takes a while to feed through to the actual numbers used by the MPC since the ONS helpfully hedonically seasonally and otherwise adjust them to exclude "outlying outcomes". Ahem. Cough. Splutter.

Hence the MPC recently started its own research department. Not to duplicate the sterling work of the ONS you understand.... No they wanted to know what the actual numbers were instead of what the politicised civil services would deliver while kneeling and chanting "all hail the emperor" at Gordon Clown.

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If USD:GBP drops below 1.70 the BoE will have to rush in with a few IR increases to support Stirling.

I just don’t get it – the pound was lower than it is now at the beginning of January – so where exactly is the pound getting hit?

All this talk about America raising their rates since x-mas yet the pound has actually risen slightly

The BOE want to devalue the pound – they keep saying that IR’s won’t go up any more – but that is not exactly making the pound crash just like the fact that America is going to raise theirs

So what is this saying – if the UK dropped their IR’s and America raised theirs the £ may drop to 1.72 at a push – to me it sounds like the BOE have got their work cut out to devalue the pound

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Regardless of what happens at the next mad hatters teaparty (BoE meeting). Interest rates are heading to 10%. There are too many infationary factors in the world, and even 10% may be too low.

I know what that means to current mortgages owners, but that is the way of the world. Only 10 years ago, 2% interest rates seemed like an impossibility.

1.70 is key support for sterling. It's a multi-year low. Batton down the hatches if she goes below 1.70 the going's going to rough!

I wonder if any of the big currency speculators like George Soros are taking up positions to hammer sterling?

1992, Norman Lamont; "it's been a difficult day"

2006, Gordon Brown; "boom not bust. Go on, take on bigger mortgages and spend more money. Everthing's fine".

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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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