Independent: Jeremy Warner's Outlook: Try As It Might, Britain Will Struggle To Resist Global Trend Towards Higher Interest Rates.

[CrashConnoisseur]

'Jeremy Warner's Outlook: Try as it might, Britain will struggle to resist global trend towards higher interest rates.':

http://news.independent.co.uk/business/com...ticle361628.ece

Nobody expects the Bank of England to raise interest rates when the Monetary Policy Committee concludes its two-day monthly meeting tomorrow, but it can at least now safely be said that the contrary prospect of a cut has faded into the indefinite future. As things stand, it is much more likely the next move will be up, quite possibly as soon as only months away.

[...snip...]

The view that we in Britain could have falling interest rates at a time when virtually everyone else is raising theirs always did to me seem a little suspect. The only way of rationalising such a perspective is on the basis that we were a lot further forward in the cycle than everyone else. Yet, perhaps regrettably, the time when domestic economies could forge along, ploughing their own distinctive furrow regardless of what was happening elsewhere, is long since gone.

Today, we are more a part of the global economy than ever before, and almost everywhere else in the world, from Europe to Japan and China, interest rates are rising. Even in the US, which has experienced a consumer and housing boom of proportionately equal duration and magnitude, rates may not be as close to the top of the cycle as previously believed.

[...snip...]

So far as Britain is concerned, most of the recent data has pointed to stronger growth. More worrying from the Bank of England's perspective, inflationary expectations are also rising. The pound doesn't look as robust as it was and energy prices are still off the scale. The MPC will continue to fence sit this week -- indeed, as several of its members have already complained, there scarcely seems any point in it meeting at all as things stand -- but the hawkish tendency will very definitely be in the ascendant once more.

[WSG]

<Conspiracy_ON> Have these Indie guys been primed with this....is the BOE going to spring a surprise hike today??<Conspiracy_OFF>

[Tempest]

Ok, i'll be the first.

A 0.25 rate rise by early Sept 2006, latest.

Housing market dies Oct 2006.

Arguments?

[Realistbear]

Mervyn may want to show the world that he is not under Gordon's control and raise the rates as a pre-emptive strike against real inflation in the economy (not CPI shoemenders).

[WSG]

Mervyn may want to show the world that he is not under Gordon's control and raise the rates as a pre-emptive strike against real inflation in the economy (not CPI shoemenders).

how are dairy products this month - i've been filling my boots with cheese

[backtoparents]

There's more..

R4 this morning - about 6:10 onwards I think. Rising IRs, inflation being higher than appeared..... hang on! What's this?

I could hear the sound of coughed up cornflakes/muesli hitting walls all over the home counties.

btp

[eurows]

The view that we in Britain could have falling interest rates at a time when virtually everyone else is raising theirs always did to me seem a little suspect.

The amazing thing to me is that all these people have been walking around in a daze. We have been saying IR will rise whilst all the newspapers have been telling everyone to wait for a cut.

So why?????? The signs were the same to them as they are to us. They fail to see the signs because they don't want to see them.

It's the same with houses prices. They want them to rise, even congratulate everyone when they do. But all those detatched from hype can see the signs and the signs say they will fall.

[SHERWICK]

Mervyn may want to show the world that he is not under Gordon's control and raise the rates as a pre-emptive strike against real inflation in the economy (not CPI shoemenders).

COBBLERS!!!

No, I agree with what you say, but aren't shoemenders traditionally referred to as cobblers?

[Guest Riser]

Ok, i'll be the first.

A 0.25 rate rise by early Sept 2006, latest.

Housing market dies Oct 2006.

Arguments?

It takes around 9-10 months for a change in rates to impact HPI so a September increase would not fully hit HPI until around the May 2007. However, I suspect we are already seeing the effects of last Augusts rate cut fading so a single rate rise could be enough to trigger the long awaited crash.

!0 month lag between Interest rates and HPI

[Warwickshire Lad]

Jeremy Warner said :-

The view that we in Britain could have falling interest rates at a time when virtually everyone else is raising theirs always did to me seem a little suspect.

EXACTLY. Isn't this what I and everyone else were banging on about for ages.

The hype over the prospect of a further rate cut was hanging about in the media for ages - doing everything that they possibly could do egg on people's hopes about keeping the housing market going.

The vested interest in keeping this market going is absolutely huge.

[OnlyMe]

Jeremy Warner said :-

EXACTLY. Isn't this what I and everyone else were banging on about for ages.

The hype over the prospect of a further rate cut was hanging about in the media for ages - doing everything that they possibly could do egg on people's hopes about keeping the housing market going.

The vested interest in keeping this market going is absolutely huge.

Stillis, Henk Potts this moerning (Barlcyas) saying that the majority of economists excpecting a rate cut and how wonderful Gordon has been in running the country.

Won't be long before Barlcays lose me as a customer, how can I trust them with my money if this is any indication of their financial acumen?

[Catch22]

Stillis, Henk Potts this moerning (Barlcyas) saying that the majority of economists excpecting a rate cut and how wonderful Gordon has been in running the country.

Won't be long before Barlcays lose me as a customer, how can I trust them with my money if this is any indication of their financial acumen?

If thats the case, will that mean Britain will become a Nation of BTL'ers......then Tesco will crush all the small BTL'ers, like it crushed all the small shopkeepers. And we will all end up paying for our rent at the Tesco checkout along with our groceries.

[scaramanga]

Stillis, Henk Potts this moerning (Barlcyas) saying that the majority of economists excpecting a rate cut and how wonderful Gordon has been in running the country.

Won't be long before Barlcays lose me as a customer, how can I trust them with my money if this is any indication of their financial acumen?

See my signature about henk potts he knows about as much about economics as i do about quantum physics...he is a ramper....a vested turd burglar,even makes david smith look like he knows what hes talking about....

[I Told You So]

IR futures market has collapsed again today, they are pretty much pricing in a rise for June

To any bulls that are reading this, myself and the many others who have been bleating on about rates rises for what seems like an eternity would like to say;

I TOLD YOU SO

[DTMark]

If thats the case, will that mean Britain will become a Nation of BTL'ers......then Tesco will crush all the small BTL'ers, like it crushed all the small shopkeepers. And we will all end up paying for our rent at the Tesco checkout along with our groceries.

Spot on. I'm not sure whether that was meant to be fasectious (sp?) but I don't think it's as far-fetched as it sounds.

[CrashConnoisseur]

If thats the case, will that mean Britain will become a Nation of BTL'ers......then Tesco will crush all the small BTL'ers, like it crushed all the small shopkeepers. And we will all end up paying for our rent at the Tesco checkout along with our groceries. [Catch22]

Will we be able to rent a house with a dent in the side for half price?

[oracle]

AAAAH,BUT!!!!!

britain CAN avoid massive hikes in IR's.

by increasing taxes on the general populus to compensate.

hence the ideas of spy-in-the-sky road pricing etc.

what the sheep havent figured out yet is that once the liquidity situaton tightens they will bear the brunt of the pain with this approach...if it's IR's it will affect business costs too,but that usually promotes changes in working practice which are helpful to a degree.

the consumer-only pain route is not a good option as it disguses malpractice in work methods,and stifles efficiency.