Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Bo E Next Move Will Be Up And Perhaps Up Again

Recommended Posts

http://www.tiscali.co.uk/news/newswire.php...ate.html?page=2

Only one of the 45 economists polled by Reuters last week predicted a cut on Thursday while the remainder said rates would stay on hold for an ninth consecutive month. But a growing minority are forecasting that the next move will be higher.
"The unequivocal strength of this latest set of data is unlikely to cause any change in interest rates at this week’s meeting but the balance of opinion on the
MPC must surely be moving towards favouring the next move being up, not down," said Alan Clarke, economist at BNP Paribas in London.
The Chartered Institute of Purchasing and Supply/RBS said its gauge of manufacturing business activity rose to 54.1 in April, its highest since late 2004.
That was well above 51.0 in March and expectations of a rise to 51.3.
The Confederation of British Industry said that its retail sales balance rose to +2 in April from -16
. Easter falling in April this year instead of March boosted the figures but most economists were upbeat about the prospects for a pick-up.
And British Bankers’ Association figures showing a 33 percent rise in mortgage approvals in March
compared with a year ago added to evidence the housing market has revived and could make policymakers wary of stoking it any further with lower rates.
Interest rate futures contracts had another day of heavy selling, pricing in a quarter point interest rate hike
to 4.75 percent by the turn of the year.

With borrowing and spending reaching frenzied levels in the UK again the government are going to find it increasingly difficult to adjust the CPI figures for much longer. There are too many lead indicators pointing toward a series of hikes. After all, the VIs themselves continually remind us that the housing market is being unerpinned by historically LOW rates. Might be time to return to historically NORMAL rates and corespondingly normal house prices?

Edited by Realistbear

Share this post


Link to post
Share on other sites

http://www.tiscali.co.uk/news/newswire.php...ate.html?page=2

Only one of the 45 economists polled by Reuters last week predicted a cut on Thursday while the remainder said rates would stay on hold for an ninth consecutive month. But a growing minority are forecasting that the next move will be higher.
So how does the majority think the rates will remain static and a minority think they will go up equates to them definitely going up at least once, if not twice?
I'm a bear myself but some of you need to try and remain focused and not fritz out and skew reports to what you WANT to read.

Share this post


Link to post
Share on other sites

So how does the majority think the rates will remain static and a minority think they will go up equates to them definitely going up at least once, if not twice?

I'm a bear myself but some of you need to try and remain focused and not fritz out and skew reports to what you WANT to read.

In a word: TREND.

Look at the broader picture. China is already heading up and Japan started on 20th March with the Commercial Banks tightening. The Fed have backtracked on the "pause" and data out recently points to several more hikes--especially due to the outflow of capital from the dollar and the need to make bonds attractive. Bottom line: the world is moving up and the BoE do not have the resources to buck the trend.

You may have missed this in the report:

But a growing minority are forecasting that the next move will be higher.

The key to understanding trends is found in the underlined word. Minorities become majorities if the trend continues.

You may not like the trend but it is there nonetheless. :)

Edited by Realistbear

Share this post


Link to post
Share on other sites

This just released which nicely illustrates trends:

http://freeserve.advfn.com/news_Fed-funds-...s_15251628.html

Fed funds futures see higher chance of continued rate hikes

NEW YORK (AFX) -- The fed fund futures market is pricing in a higher
probability of continued interest rate hikes by the Federal Reserve, after cable
channel CNBC reported late Monday that Fed Chairman Ben Bernanke reportedly felt
the media had misinterpreted his comments last week to mean that the Fed would
pause after one more rate hike. The June futures contract still implies a fed
funds rate of 5.01%, which suggests a 100% chance of a quarter percentage point
rate hike after the Fed's policy setting meeting on May 10. But the July
contract is now pricing in a 71% chance that fed funds will be at 5.25% after
the next 2 Fed meetings, vs. a 66% chance on Monday. The CNBC report surfaced
after the fed funds futures market closed on Monday.

The market looks ahead and sets a trend. The Fed are seen to be hiking more than the market thought just a few days ago. The trend for the BoE is, as the article suggests, showing signs of more economists moving toward the trend line in their view. For the BoE to remain on the sidelines in an IR hiking surge would be disaster for the pound.

Share this post


Link to post
Share on other sites

House price can only ver go up. By the year 3006 there will not be enough money in the world to buy a studio in Tooting! QUICK! BUY NOWWW!!

Share this post


Link to post
Share on other sites

Betfair are quoting 50-1 for a 25bps rate hike if anyone fancies a bet, odds on for rate hold, rarely are they wrong on this and even more rarely do the boe bods surprise against the majority

Worth a tenner? What are the odds for the meeting after this one? Odds-on for a hike?

Share this post


Link to post
Share on other sites

Worth a tenner? What are the odds for the meeting after this one? Odds-on for a hike?

This just in - forget about "trends" - looks like rates will hold for the rest of the YEAR.

UK Manufacturing bounces back - Guardian Business article

UK manufacturing bounces back

Mark Tran

Tuesday May 2, 2006

The chances of an interest rate cut this year receded almost completely today following evidence of a marked improvement in Britain's manufacturing sector.

According to the Chartered Institute of Purchasing and Supply/RBS Purchasing Managers' Index (PMI), manufacturing grew much more strongly than expected last month.

The PMI index rose from 51.0 in March to 54.1, its highest level since November 2004. Any reading above 50 signifies expansion.

Today's data should raise the Bank of England's expectations that the long-awaited rebalancing of the British economy from consumer spending to production is finally taking place.

Article continues

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Manufacturing, which accounts for 16% of UK output, showed strength across the board in the latest PMI survey.

The new orders index rose to 56.4 from 52.3 in March, its highest level since mid-2004. Export orders also picked up, rising to a five-month high of 52.5.

In addition, the pick-up is finally feeding through to more jobs. The employment index rose above 50, an indication of rising employment in the sector for the first time in 13 months.

"The message is clear, manufacturers' confidence is high and, perhaps, finally even the UK industrial sector is joining the global industrial party," said John Butler of HSBC.

"Although this survey carries a lot of weight with the MPC, the only question is whether this optimism translates into strong output in the official data."

The Bank of England is almost certain to leave borrowing costs unchanged when its monetary policy committee (MPC) makes its decision on Thursday, and will probably do likewise for the rest of the year.

"The evidence of marked improvement in the manufacturing sector further guarantees there will be no interest rate cut this Thursday," said Howard Archer of Global Insight, who had expected a cut later in the year.

"Indeed, we admit it is looking increasingly questionable whether interest rates will be trimmed further."

Meanwhile, the housing market remains strong. The latest data from the British Bankers Association (BBA) showed that household borrowing for house purchase in March remained comparable with the boom in 2003.

The number of mortgage approvals for house purchase was 85,698 in March, the highest since June 2004 and 33% higher than March last year.

In another sign that the second quarter was getting off to a good start, retail sales volumes for April came in ahead of City expectations.

The Confederation of British Industry's monthly distributive trades survey (DTS) showed that while 36% of retailers said sales volumes were down on a year ago, 38% said they were up. The balance of +2% contrasted to -16% in March.

"April's survey could be interpreted as an early sign of a mild revival on the high street, but let's not jump the gun," said John Longworth, the chairman of CBI's DTS panel said.

"The economy as a whole is still working below capacity and recent improvements in the manufacturing sector have not been led by demand for consumer goods."

The CBI said that Easter falling in April this year but in March in 2005 gave sales a boost compared with a year ago.

Saying what you think the future interest rates will be now, based on any kind of trend from the past is at best, an educated guess. To say it's anything more than that is pointless, because NO ONE can predict accurately what will happen.

Share this post


Link to post
Share on other sites

Where's Economic Sensation when you need him? <_<

Last posted 31st January at 9-48am. Popped in today at 1-59pm but did not post. Very busy at the moment probably trying to offload his BTLs. ;)

Share this post


Link to post
Share on other sites
Betfair are quoting 50-1 for a 25bps rate hike if anyone fancies a bet, odds on for rate hold, rarely are they wrong on this and even more rarely do the boe bods surprise against the majority

I can't see rates going up this month unless they really want to pee off the Labour party. I'd guess July or August for the first rise unless there's a lot of bad news in the meantime.

Share this post


Link to post
Share on other sites

A 25 points rise by christmas does not excite me. Especiallly when it's obvious rates must rise sometime in the future (ie within the next decade) given history shows they will revert to historical averages at some time. This is a non story.

Sorry.

Share this post


Link to post
Share on other sites

A 25 points rise by christmas does not excite me. Especiallly when it's obvious rates must rise sometime in the future (ie within the next decade) given history shows they will revert to historical averages at some time. This is a non story.

It looks more like two 25bps by Christmas and that DOES excite me!

Share this post


Link to post
Share on other sites

A 25 points rise by christmas does not excite me. Especiallly when it's obvious rates must rise sometime in the future (ie within the next decade) given history shows they will revert to historical averages at some time. This is a non story.

Sorry.

If there was going to be a .25% hike by Christmas I would agree 100%. I just do not see how the BoE are going to sit on the fence while the world raises rates. IMO, a .50% hike by Christmas is more likely. More if Sterling starts to wobble after Gordon's "Miracle Economy" is sussed!

Share this post


Link to post
Share on other sites

So how does the majority think the rates will remain static and a minority think they will go up equates to them definitely going up at least once, if not twice?

I'm a bear myself but some of you need to try and remain focused and not fritz out and skew reports to what you WANT to read.

Indeed. If you look hard enough you can always find evidence to bolster your faith, no matter how lacking in hard evidence there is in reality:

http://www.theregister.co.uk/2005/12/09/holy_spud/

http://www.sptimes.com/2005/06/08/Neighbor...Jesus__Al.shtml

http://www.sptimes.com/2004/03/02/Tampabay...aithful__.shtml

http://www.visionsofjesuschrist.com/weeping48.htm

etc

Share this post


Link to post
Share on other sites

Realist's religious views have got feck all to do with his views on the housing market.

And BTB's post has something to do with IR's? :blink:

Edited by Realistbear

Share this post


Link to post
Share on other sites

Does anyone get the sense that TTRTR may be doing the same? He may have bought into the "Buy low--sell high" method of investing?

Love him or loath him I think he is pretty astute; he bought at the right time and I would be very surprised if he is thinking of adding to his portfolio in the current property climate.

In fact did not someone discover him posting on an Australian property forum to this effect?

Share this post


Link to post
Share on other sites
Love him or loath him I think he is pretty astute; he bought at the right time

I'm not sure that 'astute' is the right word. I think it's more a case of happening to be a mid-20s FTB in the mid-90s.

Share this post


Link to post
Share on other sites

BTB - have you ever heard of 'poisoning the well'?

Realist's religious views have got feck all to do with his views on the housing market.

I'm making no comment on Realist's religious views. However I do think it is perfectly valid to point out that by scouring the internet, selectively, you can convince yourself (and others) of anything you like.

The links I posted illustrate extreme (and, I had hoped, humourous) examples of a similar phenomenon.

Objectivity should never be lost, and I think on HPC the concept is sometimes regarded as alien. Realistbear has referred, in a typically thoughtful turn of phrase, to 'bear baiting'. This is an important task that someone has to do. If you burn all the heretics (if you'll excuse the religious reference) you'll become just like those people who see Jesus in a potato.

Nothing to do with poisoning wells.

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...
Sign in to follow this  

  • 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.