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FrozenOut

Merv Sounds The First Significant Warning Of 2006

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To my mind this is also as good a warning that rates may fall as it is that rates may rise. It's really a warning that the MPC has to be on its guard either way.

Are you for real? :unsure:

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I posted this on another thread;

Couldn't help thinking we've been here before. Merv's know how much of a punch his speaches can pack a punch.

Actions speak louder than words, and I've yet to see any decisive action from the MPC on rates.

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You lot are just being blinkered if you seriously think that's a one sided story.

Tut tut, the things you'll celebrate are often pathetic. Can anyone remember the last time rates went up when the future was seen as potentially bad?

I'm not trying to imply the bias isn't for higher rates today, but as events unfold, things change quickly, which IMO is the guts of the story that you lot seem to be ignoring as usual at your own peril.

Don't worry, in years to come I'll still be here at the forum & you can come and tell me how LUCKY I was to have stuck with property. I'll argue of course, but you won't listen.

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You lot are just being blinkered if you seriously think that's a one sided story.

Tut tut, the things you'll celebrate are often pathetic. Can anyone remember the last time rates went up when the future was seen as potentially bad?

I'm not trying to imply the bias isn't for higher rates today, but as events unfold, things change quickly, which IMO is the guts of the story that you lot seem to be ignoring as usual at your own peril.

Don't worry, in years to come I'll still be here at the forum & you can come and tell me how LUCKY I was to have stuck with property. I'll argue of course, but you won't listen.

My god you are serious.

So whilst the rest of the world hikes rates to combat inflation, the UK will drop theirs? You CAN'T keep dropping rates just to serve the housing market, the goodtimes have gone and now it's time to pay the cheque.

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My god you are serious.

So whilst the rest of the world hikes rates to combat inflation, the UK will drop theirs? You CAN'T keep dropping rates just to serve the housing market, the goodtimes have gone and now it's time to pay the cheque.

Get your blinkers off & re-read my post. There is a message in there and I think it was very clear.

By the way, you are not Frozen Out, you are just blinkered.

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What is the message exactly?

"We've had low rates, and in the future they'll be going down (hooray!) and up! (booooooo)

Each "bump" that Merv is talking about could be 0.5 - 0.75% in an upwards direction! 0.25% up was enough to bring HPI to a skidding halt.

What will happen if inflation remains sustained through out the summer? We'll drop rates in the Winter?? (just as it starts to get colder and people need to spend more on fuel?)

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What is the message exactly?

"We've had low rates, and in the future they'll be going down (hooray!) and up! (booooooo)

Each "bump" that Merv is talking about could be 0.5 - 0.75% in an upwards direction! 0.25% up was enough to bring HPI to a skidding halt.

What will happen if inflation remains sustained through out the summer? We'll drop rates in the Winter?? (just as it starts to get colder and people need to spend more on fuel?)

If you can't read this, you are even more mad than I thought.

"After a period of robust economic growth, we approach a somewhat bumpier stretch of the road," Mr King said.

"A rebalancing of global demand is desirable but the way ahead may not be smooth," he added.

Nevertheless, he said UK inflation was close to the government's 2% target and that wage pressures remained muted.

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To my mind this is also as good a warning that rates may fall as it is that rates may rise. It's really a warning that the MPC has to be on its guard either way.

I have to say I agree with you. Having read the speech it is 'guarded' to the point of absurdity. The nearest reference to HPC is asset prices falling...

HOWEVER reading between the lines, it does provide a warning of turbulent time ahead.

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I'm a bear but I agree with you TTRTR. If there's no leap in wage demands, and general inflation doesn't go up much, why would the bank raise rates? I suspect they will raise it 0.25% in July or August as they have signalled it so much, but after that it will be a wait and see approach. If the economy starts tanking, and inflation doesn't go too far beyond the target, they will cut again. Ultimately a raise in rates is not essential for an HPC, they would help though. I actually think an HPC is looking more remote now without a serious economic shock. Property outside of London will drift sideways over the coming few years, meaning a fall in terms of real prices, and in some areas, like Wales, there will be a 10-20% drop. Even though a crash is less likely, there's no point in buying while any risk of an HPC remains, as the risk of HPI greater than savings rates outside of the capital is ludicrous, so dump your money in savings/shares/gold or whatever and watch the market for a few years.

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I'm a bear but I agree with you TTRTR. If there's no leap in wage demands, and general inflation doesn't go up much, why would the bank raise rates? I suspect they will raise it 0.25% in July or August as they have signalled it so much, but after that it will be a wait and see approach. If the economy starts tanking, and inflation doesn't go too far beyond the target, they will cut again. Ultimately a raise in rates is not essential for an HPC, they would help though. I actually think an HPC is looking more remote now without a serious economic shock. Property outside of London will drift sideways over the coming few years, meaning a fall in terms of real prices, and in some areas, like Wales, there will be a 10-20% drop. Even though a crash is less likely, there's no point in buying while any risk of an HPC remains, as the risk of HPI greater than savings rates outside of the capital is ludicrous, so dump your money in savings/shares/gold or whatever and watch the market for a few years.

Perhaps, but you could be assuming that the real rate of interest on a savings account is actually worth something (remember even with this "new" threat of IR hikes, banks are dropping their savings rates), the shares, gold etc you invest in go the right way.

You still have to pay for accomodation, if the market goes sideways, it could be a great opportunity to watch the debt get eroded over time. But this, as you state, may depend on where you live and how likely you think a drop will be.

:)

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The MPC said that rates will have to rise to keep the CPI on track in the short term. Then the rate would fall back.

Merv's speech was typical economist - mention everything, and say nothing. Interest rates will go up 1/4% in the next few months. It is impossible to predict what will happen then.

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If the economy starts tanking, and inflation doesn't go too far beyond the target, they will cut again.

I reckon that a cut (even if following a raise) will probably set off another housing mini-boom.

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Whilst I find it pathetic that a grown man like TTRTR can spend so much of his time goading the less fortunate and boasting of his wealth, I'm afraid I saw this news in the same way, not at all the green light for higher rates.

Edited by simon99

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“Focusing too much on short-run movements in demand may lead [the Bank] to misjudge the outlook for inflation,” he argued.

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Nonsense, it took several o.25% hikes, from Nov 2003 onwards

Sorry I did mean from where we are now, i.e when we got to 4.75% hpi was increasing but at a slower rate.

So what I'm saying is 4.5 - 4.75% I expect the breaks to be slammed on again, but this time I can't see any hope for a cut.

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Doncha just love the BBC spin on this

"We continue to believe that interest rates will remain unchanged through to 2007," said Howard Archer at Global Insight.

"Recent comments by Mervyn King suggest that he is currently in no hurry to tighten monetary policy."

says renta-a-gob 'economist' as FTSE plunges on inflation and IR worries

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You lot are just being blinkered if you seriously think that's a one sided story.

Tut tut, the things you'll celebrate are often pathetic. Can anyone remember the last time rates went up when the future was seen as potentially bad?

I'm not trying to imply the bias isn't for higher rates today, but as events unfold, things change quickly, which IMO is the guts of the story that you lot seem to be ignoring as usual at your own peril.

Don't worry, in years to come I'll still be here at the forum & you can come and tell me how LUCKY I was to have stuck with property. I'll argue of course, but you won't listen.

TTRTR. You are a pointless member of this forum.

I don't care when you bought your BTL's. I don't care if you make money or how much, or where you have lived, or how big you claim your big swinging dick is.

I very much doubt that you would be profiting if you bought up your little empire today. And on the back of that, every single post you make on the subject is completely redundant in relation to the issues of the day.

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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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