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Rates To Rise Down-under Despite Pain In House Market

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Rate rise likely to hit much harder this time

By Glenda Korporaal and David Uren


THE prospect of another rise in interest rates today has raised fears of a financial backlash, with
homeowners owing more than twice what they did the last time rates were as high.
With rising petrol prices already cutting into household incomes - reducing the benefit of the latest tax cuts and welfare payments introduced last month - economists are worried another one or two rate hikes could have a much more dramatic effect than previous increases.

Imagine a couple of small hikes here with people maxed out and having mortgages with the highest multiples in history? :o

Its easy to see why Gordon cannot allow a hike at the BoE--it will crush a huge segment of the market and create forests of for sale signs up and down the country. Even if only 10% of the market would be affected by IR hikes that is a massive number of distressed sellers.

Its just a question of time before the BoE are forced to move and my guess is that we shall see some action this side of Christmas if the global pressures are still forcing everyone else to hike. The Gordon will have a choice between a sterling crisis or the seeds of 1980's style inflation--or both. The longer he delays the deeper he buries himself.

Edited by Realistbear

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  • 302 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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