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I look forward to receiving their official response. Perhaps more messages of support to the BOE from HPC posters would be a good idea. :)

-----Original Message-----

Sent: Thursday, August 03, 2006 3:24 PM

To: Enquiries@bankofengland.co.uk

Subject: At last

*************************************************

This email has reached the Bank via an external network.

Its attachments have been checked for known viruses.

However, if prompted with a warning when opening

attachments you MUST click the DISABLE MACROS button.

*************************************************

Well done - at last the long-awaited rise in your base rate. Please keep up the good work over the next few months until the house price bubble is fully popped.

Surely, you must be as concerned as I am about the £1.2 trillion of personal debt mostly secured on over-inflated house prices. Well done Mervyn, you were right all along - HOUSE PRICES ARE A MATTER OF PERSONAL OPINION WHEREAS DEBT IS REAL.

Cheers

Subject: RE: At last

Date: Thu, 3 Aug 2006 16:58:18 +0100

From: "Choudhry, Usman" <Usman.Choudhry@bankofengland.co.uk> Add to Address Book

Thank you for your e-mail. It has been logged on our system (reference 19357) and we will reply to you in due course.

Regards,

Usman Choudhry

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Can't believe it - got the following reply from the Boe to my somewhat sacarstic message of congratulation.

Despite the expected Brownite spin, I do detect some signs of anxiety (unsecured personal debt struggle, unsustainable hpi until the BOE's finely-tuned rate increase). Anyway, the message seems to be that everything is under control and heading for a soft landing .......... I predict a great future for Roger Beaton when Gordy takes over as PM (unless of course TB hangs on until the 'miracle economy' goes tits up ......

Thank you for your e-mail of 3 August about the change in the official bank rate, the level of house prices and the level of household debt. Your e-mail has been passed to me to reply.

First, please let me thank you for your words of encouragement and if I may, I would like to take the opportunity to explain the Bank’s responsibilities regarding monetary policy. As you may know, the remit of the Monetary Policy Committee (MPC) here at the Bank is to set interest rates to meet the Government’s inflation target which is currently 2% (as measured by the 12-month increase in the Consumer Prices Index). Subject to this objective of maintaining price stability, the Committee must also support the Government’s economic policy, including its objectives for growth and employment. We have to look at the nation and the economy as a whole and identify the right rate of interest that will enable us to meet the inflation target.

When the Committee meets each month they look at a wide range of data and information from many sources such as house price inflation, consumer spending and borrowing, investment, exports, employment, wages and other costs and prices before making decisions about interest rates. There are some factors that may in themselves point to higher interest rates, while others suggest lower rates or no change. It is a balance of all factors and the overall outlook for inflation that the MPC has to judge – I must stress that the MPC does not target house prices.

Turning now to the recent rate rise, in the news release issued at the time, the MPC gave as their reasons the following, which I quote verbatim as it precisely encapsulates their thinking.

“The pace of economic activity has quickened in the past few months. Household spending appears to have recovered from its post-Christmas dip. Business investment

growth and investment intentions have also picked up. In the United Kingdom's main export markets growth has remained robust. As a result, over the past few quarters GDP growth has been at, or a little above, its long-run average and business surveys point to continued firm growth. The margin of spare capacity in the economy appears small.

CPI inflation picked up to 2.5% in June, and is expected to remain above the 2.0% target for some while. Higher energy prices have led to greater inflationary pressures, notwithstanding muted earnings growth and a squeeze on profit margins. Although the path of energy prices is extremely uncertain, energy price inflation is expected to moderate in the medium term. But some recovery in profit margins and pay growth is likely to mean that consumer price inflation will move only gradually back to the target.”

With respect to household debt, at the press conference associated with the publication of our latest inflation report on 9 August, the Governor has reiterated his views on the current level of debt. He reported that the picture, as far as secured debt is concerned, remains relatively benign and not a serious threat to the economy. However he drew attention to the significant rise in households reporting difficulties mainly as a result of unsecured debt. The Bank believes that individuals are best placed to judge their own financial circumstances and decide whether they can make repayments on any borrowings they may undertake. We have also drawn attention to the need for both borrowers and lenders to take into account the fact that debt service costs may rise further in the future if interest rates were to change. Lending institutions apply their own criteria to individual lending decisions but there are limitations enforced by the regulator, the Financial Services Authority, regarding overall lending.

Turning now to house prices, I am sure that you are aware that there are many factors which affect the price of residential property, and interest rates are just one of these. Of course, as interest rates have fallen and become more stable than in the past, people have increased their borrowing and demand for houses, which has contributed to higher house prices. But other factors impact on the demand for, and supply of, housing, including geographic location, demographics and the growth rate of the housing stock. The impact of these factors is perhaps illustrated by the differentials between property prices in different areas of the country.

We have certainly viewed the rate of increase in house prices over recent years as unsustainable and appreciate the impact this is having on some people. The Governor has commented that house prices were remarkably high in relation to other factors such as average earnings. House price inflation is certainly considered by the MPC because housing wealth serves as collateral for borrowing and directly impacts on consumer spending. As housing wealth grows, consumption and aggregate demand may grow faster and eventually lead to higher inflation. However, as I indicated above, the MPC does not have a target for house prices – their remit is to target consumer price inflation. Decisions taken by the MPC, which are often finely balanced, are always made in order to achieve this target.

The work of the Bank’s Monetary Policy Committee has helped to keep inflation relatively low and close to the Government’s target over recent years. This has helped to create the necessary conditions to enable the economy to grow in a stable and sustainable way which is a benefit to society as a whole in the long term.

Thank you once again for taking the trouble to write to the bank, I hope that I have been of assistance to you in explaining the background behind the rate rise and the work of the MPC.

Yours sincerely

Roger Beaton

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Crivens. That was a bit long winded for a reply. Do you think they have a one size fits all reply which is then edited slightly to make it more personal? It is difficult to believe that a highly paid professional has to write detailed replies to every e-mail. In fact this might be why our taxes are so high.

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We have also drawn attention to the need for both borrowers and lenders to take into account the fact that debt service costs may rise further in the future if interest rates were to change.

hehe, change where "change" = go up. :lol:

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If you're gonna email the BoE take up a small point and hammer them on it, with loads of supporting information. That reply is bog standard... Although nice of them to point out how house price rises are unsustainable.

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YEP i got my reply today........long winded....and no apparent secured borrowing concerns?

Dear Sir/Madam

Thank you for your e-mail of 4 August concerning the recent rise in the Official Bank Rate. Your e-mail has been passed to me to reply.

First, please let me thank you for your words of encouragement and, if I may, I would like to take the opportunity to explain the Bank’s responsibilities regarding monetary policy. As you may know, the remit of the Monetary Policy Committee (MPC) here at the Bank is to set interest rates to meet the Government’s inflation target which is currently 2% (as measured by the 12-month increase in the Consumer Prices Index). Subject to this objective of maintaining price stability, the Committee must also support the Government’s economic policy, including its objectives for growth and employment. We have to look at the nation and the economy as a whole to identify the rate of interest that will enable us to meet the inflation target.

When the Committee meets each month they look at a wide range of data and information from many sources such as consumer spending and borrowing, investment, exports, employment, house price inflation, wages and other costs and prices before making decisions about interest rates. There are some factors that may in themselves point to higher interest rates, while others suggest lower rates or no change. It is a balance of all factors and the overall outlook for inflation that the MPC has to judge – but I must stress that the MPC does not target house prices.

Turning now to the recent rate rise, in the news release issued at the time, the MPC gave as their reasons the following, which I quote verbatim as it precisely encapsulates their thinking:

“The pace of economic activity has quickened in the past few months. Household spending appears to have recovered from its post-Christmas dip. Business investment growth and investment intentions have also picked up. In the United Kingdom's main export markets growth has remained robust. As a result, over the past few quarters GDP growth has been at, or a little above, its long-run average and business surveys point to continued firm growth. The margin of spare capacity in the economy appears small.

CPI inflation picked up to 2.5% in June, and is expected to remain above the 2.0% target for some while. Higher energy prices have led to greater inflationary pressures, notwithstanding muted earnings growth and a squeeze on profit margins. Although the path of energy prices is extremely uncertain, energy price inflation is expected to moderate in the medium term. But some recovery in profit margins and pay growth is likely to mean that consumer price inflation will move only gradually back to the target.”

With respect to household debt, at the press conference associated with the publication of our latest Inflation Report on 9 August, the Governor has reiterated his views on the current level of debt. He reported that the picture, as far as secured debt is concerned, remains relatively benign and not a serious threat to the economy. However he drew attention to the significant rise in households reporting difficulties mainly as a result of unsecured debt. The Bank believes that individuals are best placed to judge their own financial circumstances and decide whether they can make repayments on any borrowings they may undertake. We have also drawn attention to the need for both borrowers and lenders to take into account the fact that debt service costs may rise further in the future if interest rates were to change. Lending institutions apply their own criteria to individual lending decisions but there are limitations enforced by the regulator, the Financial Services Authority, regarding overall lending.

Turning now to house prices, I am sure that you are aware that there are many factors which affect the price of residential property, and interest rates are just one of these. Of course, as interest rates have fallen and become more stable than in the past, people have increased their borrowing and demand for houses, which has contributed to higher house prices. But other factors impact on the demand for, and supply of, housing, including geographic location, demographics and the growth rate of the housing stock. The impact of these factors is perhaps illustrated by the differentials between property prices in different areas of the country.

We have viewed the rate of increase in house prices over recent years as unsustainable and appreciate the impact this is having on some people. The Governor has commented that house prices were high in relation to other factors such as average earnings. House price inflation is considered by the MPC because housing wealth serves as collateral for borrowing and impacts on consumer spending. As housing wealth grows, consumption and aggregate demand may grow faster and eventually lead to higher inflation. However, as I indicated above, the MPC does not have a target for house prices – its remit is to target consumer price inflation. Decisions taken by the MPC, which are often finely balanced, are always made in order to achieve this target.

Thank you once again for taking the trouble to write to the bank, and I hope that I have been of assistance to you in explaining the background behind the rate rise and the work of the MPC.

Yours faithfully

Malcolm Shemmonds

***********************************************************************************

.

***********************************************************************************

_____________________________________________________________________

This e-mail has been scanned for known viruses by the Messagelabs SkyScan Service.

Edited by northern numpty

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YEP i got my reply today........long winded....and no apparent secured borrowing concerns?

Dear Sir/Madam

Thank you for your e-mail of 4 August concerning the recent rise in the Official Bank Rate. Your e-mail has been passed to me to reply.

First, please let me thank you for your words of encouragement and, if I may, I would like to take the opportunity to explain the Bank’s responsibilities regarding monetary policy. As you may know, the remit of the Monetary Policy Committee (MPC) here at the Bank is to set interest rates to meet the Government’s inflation target which is currently 2% (as measured by the 12-month increase in the Consumer Prices Index). Subject to this objective of maintaining price stability, the Committee must also support the Government’s economic policy, including its objectives for growth and employment. We have to look at the nation and the economy as a whole to identify the rate of interest that will enable us to meet the inflation target.

When the Committee meets each month they look at a wide range of data and information from many sources such as consumer spending and borrowing, investment, exports, employment, house price inflation, wages and other costs and prices before making decisions about interest rates. There are some factors that may in themselves point to higher interest rates, while others suggest lower rates or no change. It is a balance of all factors and the overall outlook for inflation that the MPC has to judge – but I must stress that the MPC does not target house prices.

Turning now to the recent rate rise, in the news release issued at the time, the MPC gave as their reasons the following, which I quote verbatim as it precisely encapsulates their thinking:

“The pace of economic activity has quickened in the past few months. Household spending appears to have recovered from its post-Christmas dip. Business investment growth and investment intentions have also picked up. In the United Kingdom's main export markets growth has remained robust. As a result, over the past few quarters GDP growth has been at, or a little above, its long-run average and business surveys point to continued firm growth. The margin of spare capacity in the economy appears small.

CPI inflation picked up to 2.5% in June, and is expected to remain above the 2.0% target for some while. Higher energy prices have led to greater inflationary pressures, notwithstanding muted earnings growth and a squeeze on profit margins. Although the path of energy prices is extremely uncertain, energy price inflation is expected to moderate in the medium term. But some recovery in profit margins and pay growth is likely to mean that consumer price inflation will move only gradually back to the target.”

With respect to household debt, at the press conference associated with the publication of our latest Inflation Report on 9 August, the Governor has reiterated his views on the current level of debt. He reported that the picture, as far as secured debt is concerned, remains relatively benign and not a serious threat to the economy. However he drew attention to the significant rise in households reporting difficulties mainly as a result of unsecured debt. The Bank believes that individuals are best placed to judge their own financial circumstances and decide whether they can make repayments on any borrowings they may undertake. We have also drawn attention to the need for both borrowers and lenders to take into account the fact that debt service costs may rise further in the future if interest rates were to change. Lending institutions apply their own criteria to individual lending decisions but there are limitations enforced by the regulator, the Financial Services Authority, regarding overall lending.

Turning now to house prices, I am sure that you are aware that there are many factors which affect the price of residential property, and interest rates are just one of these. Of course, as interest rates have fallen and become more stable than in the past, people have increased their borrowing and demand for houses, which has contributed to higher house prices. But other factors impact on the demand for, and supply of, housing, including geographic location, demographics and the growth rate of the housing stock. The impact of these factors is perhaps illustrated by the differentials between property prices in different areas of the country.

We have viewed the rate of increase in house prices over recent years as unsustainable and appreciate the impact this is having on some people. The Governor has commented that house prices were high in relation to other factors such as average earnings. House price inflation is considered by the MPC because housing wealth serves as collateral for borrowing and impacts on consumer spending. As housing wealth grows, consumption and aggregate demand may grow faster and eventually lead to higher inflation. However, as I indicated above, the MPC does not have a target for house prices – its remit is to target consumer price inflation. Decisions taken by the MPC, which are often finely balanced, are always made in order to achieve this target.

Thank you once again for taking the trouble to write to the bank, and I hope that I have been of assistance to you in explaining the background behind the rate rise and the work of the MPC.

Yours faithfully

Malcolm Shemmonds

***********************************************************************************

.

***********************************************************************************

_____________________________________________________________________

This e-mail has been scanned for known viruses by the Messagelabs SkyScan Service.

Does it not make you proud to be British...!!! ..............Ich habe nicht meine Papiere :blink:

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  • 333 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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