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ianbeale

Betfair: Interest Rates

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The odds on a 0.25 hike are starting to shorten up nicely as we approach D-day from 11/2 to 7/2 since monday morning. This is the shortest the odds have been for over a year and significantly the first time odds have shortened in the week of an MPC meet in recent memory. I hope to see 2/1 by thursday. Fingers crossed this could be it - the HPC Holy Grail of an IR hike.

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I wouldn't get too excited about it. Surely the expected 0.25% rate rise won't have much effect and certainly won't bring on an overnight house price crash?

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Guest Alright Jack

I wouldn't get too excited about it. Surely the expected 0.25% rate rise won't have much effect and certainly won't bring on an overnight house price crash?

I didn't hear you, could you repeat that please?

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I wouldn't get too excited about it. Surely the expected 0.25% rate rise won't have much effect and certainly won't bring on an overnight house price crash?

Quite possibly it is all that is needed.

People actually believe that rates won't go up. If they do it will be a clear signal that actually interest rates can go up, they could go up further and therefore the kind of debt you need to take on to buy property at these silly prices is too much.

Mortgage companies have already pushed up fixed rates more than 0.25% since beginning of the year, tempting people to take out tracker mortgages that will go up 0.25% overnight!!!!

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I wouldn't get too excited about it. Surely the expected 0.25% rate rise won't have much effect and certainly won't bring on an overnight house price crash?

Imo we are on a knife edge. 0.25% increase could well be the last straw. True, we will not see an overnight crash but when confidence starts to slip it's going to go all the way.

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I think IR will stay on hold and CPI inflation measure will be either redefined or the boundries redrawn

BOE/GB have no interest in slowing borrowing - only hiding the reasons why people are borrowing (inflation) and it's effects (futher inflation)

Edited by dnd

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I doubt they'll raise this month, but I don't think the BoE can hold on much longer and maintain any credibility: even the papers are starting to point out the problems with inflation right now, so it would be difficult for Brown to change the targets without getting a lot of bad press.

In any case, if they don't raise soon the pound will start to suffer, which will import more inflation from abroad.

Edited by MarkG

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Qn : what are the other good indicators for what the market thinks interest rates will be after the meeting ?

I often hear 'the market has priced in a rise' etc etc. Is there an easily accessible spot price (betfair notwithstanding) that reflects this ?

(I'm sure there's an obvious one, so don't hold back)

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I doubt they'll raise this month, but I don't think the BoE can hold on much longer and maintain any credibility: even the papers are starting to point out the problems with inflation right now, so it would be difficult for Brown to change the targets without getting a lot of bad press.

In any case, if they don't raise soon the pound will start to suffer, which will import more inflation from abroad.

Didn't seem to bother him when he redefined the 'economic cycle' recently...

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In any case, if they don't raise soon the pound will start to suffer, which will import more inflation from abroad.

When are you going to let this go and admit it is absolute drivel. Just a few months ago the pound was at 1.73 and everyone was screaming for higher rates to protect the pound.

It's knocking on 1.90 again now. So, over the last few months, imported goods (priced in dollars) have become a lot cheaper to buy in sterling.

With sterling so high, they'll be screaming for rate cuts any time now.

And, please, no responses about an IR being priced in. A 0.25% rise priced in would mean a couple of cents - bugger all in the scheme of things.

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I think IR will stay on hold and CPI inflation measure will be either redefined or the boundries redrawn

BOE/GB have no interest in slowing borrowing - only hiding the reasons why people are borrowing (inflation) and it's effects (futher inflation)

You have defined Gordon's bottom line approach to IR. HPI-MEW has been driving the Miracle Economy. Higher IR will cause it to drive off the cliff.

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People say weird things .... the BOE cannot hold on as it will lose credibility.

Talk about deluded.

'Lose credibility ...'

What so no-one will take any notice when they raise or lower rates? Their deliberations won't be pored over and analyzed in the press.

You're nuts. Start looking at the world as it is instead of deluding yourself that the BOE can 'lose credibility'

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What are the odds on interest rates remaining the same. Cus that's what's going to happen.

:(

i know thats what bootle and all the other journo economists are saying - but there a bunch of f*cking cocks!!!

The Mpc are professional economists who work with facts not feelings. The last boe infalation report priced in a .25 hike and cpi and hpi has gone above expectation since. There is no resaon to wait - raise the rates now. If they do tehn i look forward to what HPC goodies might be in store in the next boe quarterly report on 14 aug.

keep the faith

IB

(im calling it now - 5% base rate by year end with expectation of more to follow - red year on year figures by mar 07)

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i know thats what bootle and all the other journo economists are saying - but there a bunch of f*cking cocks!!!

The Mpc are professional economists who work with facts not feelings. The last boe infalation report priced in a .25 hike and cpi and hpi has gone above expectation since. There is no resaon to wait - raise the rates now. If they do tehn i look forward to what HPC goodies might be in store in the next boe quarterly report on 14 aug.

keep the faith

IB

(im calling it now - 5% base rate by year end with expectation of more to follow - red year on year figures by mar 07)

What on earth does it matter what you are calling now. There has been a lot of calling on here for well over 2 years and all that has happened is that prices keep rising.

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People actually believe that rates won't go up. If they do it will be a clear signal that actually interest rates can go up,

... I'm not holding my breath on a rate rise this aug, but if it happened I'd possibly expect people to react as you describe. There is however a precedence for raising and then cutting almost whenever remotely possible (last aug's cut). In that sense peeps might not take a rise seriously ... the MPC confused the picture last aug, so understanding how movements will be received is even more af an art than it used to be ....

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When are you going to let this go and admit it is absolute drivel. Just a few months ago the pound was at 1.73 and everyone was screaming for higher rates to protect the pound.

Sigh.

The only reason that Sterling is that high against the US dollar is because the markets expect rates to go up. Why is that so hard to understand?

If the markets conclude that the BoE aren't going to raise rates any time soon, the pound will drop dramatically. Also, the US dollar is dropping as the markets are starting to believe that the US rate rises will stop soon... so using it as a benchmark is silly.

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It does seem something is going on, the pound has gone back up against the Canadian dollar from around 2 to 2.1. I am hoping its going to go up a more as I will be buying quite a lot of CDN for a 6 month stay there soon.

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Sigh.

The only reason that Sterling is that high against the US dollar is because the markets expect rates to go up. Why is that so hard to understand?

If the markets conclude that the BoE aren't going to raise rates any time soon, the pound will drop dramatically. Also, the US dollar is dropping as the markets are starting to believe that the US rate rises will stop soon... so using it as a benchmark is silly.

But the markets have been expecting interest rates here for some time & it ain't just happened :( It seems the BOE can get away month after month with just 'thinking about' raising interest rates & the £ stays stupidly high against the $ & other currencies.

I bet there won't be a rise this week & Sterling will weaken about 2 cents then start to go up yet again as the BOE say 'But there is a possibility of a rise next month' & on & on it goes :angry:

It really does seem that the BOE can get away with this sleight of hand trick & keep Sterling strong forever :angry:

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i know thats what bootle and all the other journo economists are saying - but there a bunch of f*cking cocks!!!

Unlike the fine gentlemen at Betfair, presumably. Who says the era of debate and wit is over.

Lady Astor to Winston Churchill: (outraged) I do believe your are drunk, sir!

Winston Churchill to Lady Astor: Maybe... but in the morning I will be sober, and you will still be a f*cking ****.

Back on topic, 7/2 still makes a rise less likely than not so I'm not sure why so many pairs of knickers are getting quite as damp as they are on this threas (other than rather spiteful wishful thinking). To echo a previous question slightly, what are the odds on a cut at Betfair?

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Unlike the fine gentlemen at Betfair, presumably. Who says the era of debate and wit is over.

Lady Astor to Winston Churchill: (outraged) I do believe your are drunk, sir!

Winston Churchill to Lady Astor: Maybe... but in the morning I will be sober, and you will still be a f*cking ****.

Back on topic, 7/2 still makes a rise less likely than not so I'm not sure why so many pairs of knickers are getting quite as damp as they are on this threas (other than rather spiteful wishful thinking). To echo a previous question slightly, what are the odds on a cut at Betfair?

Odds on a cut of 0.25% at Betfair are 299/1 :o Odds on a rise are now 3/1 with no change the red hot fav at 1/2.

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Odds on a cut of 0.25% at Betfair are 299/1 :o Odds on a rise are now 3/1 with no change the red hot fav at 1/2.

Got to worth a quid on a cut.

By the way, does Betfair always look for a 13% magin on it's positions (I'm assuming that there isn't another option)?

Edited for extras.

Edited by Lionel Richtea

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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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