I Told You So Posted July 5, 2006 Share Posted July 5, 2006 Apart from Gordon Brown wont let it happen http://www.marketwatch.com/News/Story/Stor...amp;siteid=mktw Last Update: 8:46 AM ET Jul 5, 2006 NEW YORK (MarketWatch) -- Treasurys fell early Wednesday, sending yields higher, after a private-sector jobs survey showed the strongest employment growth in its five-year history, raising expectations for the June jobs report scheduled for release Friday. http://news.independent.co.uk/business/new...icle1160995.ece Fears of rate rises after jump in inflation By Philip Thornton, Economics Correspondent Published: 05 July 2006 Inflation rose sharply across the major industrialised countries in May, according to a report that will fuel fears that central banks are about to embark on another round of interest rate rises. Tick tock tick tock, not long to wait now. Quote Link to comment Share on other sites More sharing options...
kingofnowhere Posted July 5, 2006 Share Posted July 5, 2006 Tick tock tick tock, not long to wait now. Because the BOE are in no hurry Unemployment is rising, inflation is under control, wage inflation is under control, the pound is up 1.25% first half year. And the BOE last inflation report didn't see expect any rise soon, in fact not until 2Q07. The last set of minutes didn't show any inclination of rising rates soon. You might have one before year end, but one 0.25% rise is hardly going to create a crash, is it? Quote Link to comment Share on other sites More sharing options...
Realistbear Posted July 5, 2006 Share Posted July 5, 2006 Gordon has the right mix in his CPI basket. There is no inflation. As long as sterling is as high as it is there is no need to raise the rates--at least not according to Gordon. Quote Link to comment Share on other sites More sharing options...
I Told You So Posted July 5, 2006 Author Share Posted July 5, 2006 Thats the whole point the BoE have wildly underestimated inflation, its showing up across the world and will hit our measure soon they will have no choice. Quote Link to comment Share on other sites More sharing options...
enworb Posted July 5, 2006 Share Posted July 5, 2006 Apart from Gordon Brown wont let it happen http://www.marketwatch.com/News/Story/Stor...amp;siteid=mktw Last Update: 8:46 AM ET Jul 5, 2006 NEW YORK (MarketWatch) -- Treasurys fell early Wednesday, sending yields higher, after a private-sector jobs survey showed the strongest employment growth in its five-year history, raising expectations for the June jobs report scheduled for release Friday. http://news.independent.co.uk/business/new...icle1160995.ece Fears of rate rises after jump in inflation By Philip Thornton, Economics Correspondent Published: 05 July 2006 Inflation rose sharply across the major industrialised countries in May, according to a report that will fuel fears that central banks are about to embark on another round of interest rate rises. Tick tock tick tock, not long to wait now. You bears are like Tottenham Hotspurs. You don't know when you been beaten It's not up to bulls to tell you why IR won't rise. You should convince us as to why you think they will....and then try to convince GB. Quote Link to comment Share on other sites More sharing options...
munimula Posted July 5, 2006 Share Posted July 5, 2006 Interest rates ARE going UP. Base rate isn't (yet) but mortgage rates have increased at least .25 points since beginning of the year. Those are the rates that matter Quote Link to comment Share on other sites More sharing options...
Patience is a virtue isn't it! Posted July 5, 2006 Share Posted July 5, 2006 Interest rates ARE going UP. Base rate isn't (yet) but mortgage rates have increased at least .25 points since beginning of the year. Those are the rates that matter But the interest rate you get from the bank has gone down? What is that all about? Quote Link to comment Share on other sites More sharing options...
munimula Posted July 5, 2006 Share Posted July 5, 2006 You might have one before year end, but one 0.25% rise is hardly going to create a crash, is it? duh! yes, quite probably. Especially against a backdrop of rising fuel bills, increasin unemployment. Debt mountain still growing at 10% per annum, .25 increase is massive when you consider the increase in debt is being taken on by a minority of people buying their first homes etc. Mortgage rates already up .25 points this year. When IRs actually do start to go up, even .25 or .5 increases could mean approx 1% interest increases on mortgages and that could very easily signal the tipping point. BTL holding up market and accepting loses on investment, accepting their BTL is costing them £100 a month. Small interest rate increases could turn this into £200+ per month very easily and therefore there has to be a point when even the most stupid can see that BTL is expensive. This will be the tipping point. But the interest rate you get from the bank has gone down? What is that all about? increasing profit margins, covering bad debts etc. Reduce savings rates to allow them to reduce borrowing rates to be more competitive. Debt is where the money is. Quote Link to comment Share on other sites More sharing options...
Golden Shower Posted July 5, 2006 Share Posted July 5, 2006 Because the BoE voted 7-1 to hold. The one person who voted for a rise has sadly passed on. They are in no hurry and frankly there's no need for a rapid rise in IRs. Dream on. Quote Link to comment Share on other sites More sharing options...
Patience is a virtue isn't it! Posted July 5, 2006 Share Posted July 5, 2006 increasing profit margins, covering bad debts etc. Reduce savings rates to allow them to reduce borrowing rates to be more competitive. Debt is where the money is. Does make you think. I don't think I went wrong not buying a house, but I do think I made a mistake saving all that money up, when really I should just have been borrowing it. Quote Link to comment Share on other sites More sharing options...
munimula Posted July 5, 2006 Share Posted July 5, 2006 Does make you think. I don't think I went wrong not buying a house, but I do think I made a mistake saving all that money up, when really I should just have been borrowing it. Not in the long run. It's just things are a bit messed up at the moment. Saving in the long run will make you much more wealthy and secure. You get interest on your savings, you pay interest on your debt. Compounding interest is a very powerful thing in the longterm. I've been saving into ISAs for 5 years now and next year I'll clear approx £750 interest on this alone. Quote Link to comment Share on other sites More sharing options...
steve99 Posted July 5, 2006 Share Posted July 5, 2006 Interest rates wont go up shortly because Ive saved all my pennies to buy a house and theyre sitting in the banks collecting f*!k all interest, thats why. Yep folks, its my fault, the day I spend that cash they will double and house prices will drop like lead! Quote Link to comment Share on other sites More sharing options...
zag2me Posted July 5, 2006 Share Posted July 5, 2006 Thats why you borrow lots when interest rates are low, and save lots when interest rates are high. Its simple Quote Link to comment Share on other sites More sharing options...
I Told You So Posted July 5, 2006 Author Share Posted July 5, 2006 Another drop off in Short Sterling this afternoon the city seem to agree with my line of thought, 2 hikes pretty much priced in by the end of the year. Quote Link to comment Share on other sites More sharing options...
dogbox Posted July 5, 2006 Share Posted July 5, 2006 The BOE wont do anything to send the property market into freefall. Ive seen countless theories as to why our rates will increase since joining HPC, all sounded very impressive and logical but in the end amounted to no more that a splash of Lizard p1ss. Quote Link to comment Share on other sites More sharing options...
zag2me Posted July 5, 2006 Share Posted July 5, 2006 The "city" priced in rate rises for August we where all told 6 months ago. Are you sure? The betting exchanges are always the best place to go to "predict the future" Quote Link to comment Share on other sites More sharing options...
munimula Posted July 5, 2006 Share Posted July 5, 2006 Another drop off in Short Sterling this afternoon the city seem to agree with my line of thought, 2 hikes pretty much priced in by the end of the year. That's all we need. The expectation of IR rises will drive mortgage rates higher anyway. Quote Link to comment Share on other sites More sharing options...
kingofnowhere Posted July 5, 2006 Share Posted July 5, 2006 Another drop off in Short Sterling this afternoon the city seem to agree with my line of thought, 2 hikes pretty much priced in by the end of the year. Twaddle one is priced in (How many times do I have to explain this) , as you have to adjust the SS rate. Unless you think current base rate is Short Sterling (95.300) ie 4.7%! Quote Link to comment Share on other sites More sharing options...
warwickbloke Posted July 5, 2006 Share Posted July 5, 2006 Just being lazy, has anybody got figures on the amount the banks have recorded as 'Savings' & what amounts are 'Savings' but invested in property or stocks. Maybe there is so little cash saved it is OK to lower the interest rates because such a small amount is invested, & the banks wish people to move finances to other investments. They can doctor the figures better in stocks rather than in hard cash. Despite all the noise about people saving for the future, it seems the incentives diminish daily. Quote Link to comment Share on other sites More sharing options...
I Told You So Posted July 5, 2006 Author Share Posted July 5, 2006 IG index Dec06 95.03 95.04 current price now that says to me a stronger likelihood of 5.0% by year end than 4.75% even with your adjustments Quote Link to comment Share on other sites More sharing options...
Pablo-silver or lead? Posted July 5, 2006 Share Posted July 5, 2006 I/R are going up in the UK not down. Sentiment is highly suceptable to higher I/R, because many people are already robbing peter to pay paul due to being squeezed by a combination of rising 'real' living costs and massive tax burden and unemployment. One .25% rise in I/R (due july/Aug) will turn sentiment, a second befor the year end will be the catalyst. There will be further rises throughout 07. Property prices will bottom out in late 08 early 09. Property prices in the hottest areas relative to where they started their climb from will be hardest hit (especially in the north). I can see -35 tp 45% drops on many properties of a particular type in particular geographical markets. Nothing anyone can do will change these events. Pablo Silver or Lead? Quote Link to comment Share on other sites More sharing options...
kingofnowhere Posted July 5, 2006 Share Posted July 5, 2006 IG index Dec06 95.03 95.04 current price now that says to me a stronger likelihood of 5.0% by year end than 4.75% even with your adjustments No it doesn't you have to make a min of 0.15% downwards in the expected interest rates 6 months out, and that is the min possible Therefore 95.04+0.15 is 95.19 gives an implied rate of 4.81% or 0.06/.25 or 24% chance of 5% And that is being overly generous to you as 0.15% is the min 6 months out, and we are now 7 months out and a more realistic downward would be 0.2%-0.25% (For settlement this month the market has a premium of 0.2) Basically on any reasonable adjustment you are only going to get one increase before year end Quote Link to comment Share on other sites More sharing options...
I Told You So Posted July 5, 2006 Author Share Posted July 5, 2006 yeah pablo lets have a high five your so right, the next 18 - 24mths is going to be hilarious. Quote Link to comment Share on other sites More sharing options...
binkybonka Posted July 5, 2006 Share Posted July 5, 2006 Not in the long run. It's just things are a bit messed up at the moment. Saving in the long run will make you much more wealthy and secure. You get interest on your savings, you pay interest on your debt. Compounding interest is a very powerful thing in the longterm. I've been saving into ISAs for 5 years now and next year I'll clear approx £750 interest on this alone. If you are looking long term and lets assume that as with the assumptions about interset rates and property prices the rises and falls are cyclical , you will make FAR more money by investing in property at the correct times in the cycle and using high gearing than you could ever make by saving alone. Bear in mind that house prices have doubled or tripled in the past decade. By timing the next low and jumping in as many have done with this rise, you will make a fortune. £750 interest. Is this per day, week, month or annum? Quote Link to comment Share on other sites More sharing options...
I Told You So Posted July 5, 2006 Author Share Posted July 5, 2006 KoN where dyou get the 0.15 adjustment, and by my reckoning its 6mths out. Yes i'm sure an adjustment needs to be made but that seems a bit toppy. Quote Link to comment Share on other sites More sharing options...
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