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FTBagain

Very Doom Laiden Piece On The Bbc

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Turned the TV on hust in time to catch the end of an artical on Breakfast News.

Some chap in a flat is having to cut back, :( Then they cut to the reporter who is having a typical breakfast, egg, bacon and toast (Lucky sod). Apparently all these item have gone up well above the rate of inflation so interest rates "will HAVE to go up"!

Then they had a former member of the MPC on (I cannot remember her name it was about 6:45 :rolleyes: ) She finished by saying "I would not be surprised to see interest rates at about 6% by the middle of next year" ! I could not believe my ears. I was further gob smacked when the reporter finished of by saying prices are rising so interest rates have to go up!! :o On the BBC as well.

Or was it all a dream! :huh::lol:

Cheered me up ;)

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Yep, I caught it as well, VERY bearish. It was music to my ears, even grabbed the wifee and made her watch the guy go on about how much his morgage has risen.

:D

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Turned the TV on hust in time to catch the end of an artical on Breakfast News.

Some chap in a flat is having to cut back, :( Then they cut to the reporter who is having a typical breakfast, egg, bacon and toast (Lucky sod). Apparently all these item have gone up well above the rate of inflation so interest rates "will HAVE to go up"!

Then they had a former member of the MPC on (I cannot remember her name it was about 6:45 :rolleyes: ) She finished by saying "I would not be surprised to see interest rates at about 6% by the middle of next year" ! I could not believe my ears. I was further gob smacked when the reporter finished of by saying prices are rising so interest rates have to go up!! :o On the BBC as well.

Or was it all a dream! :huh::lol:

Cheered me up ;)

Quick I had better get over to the BBC site to check that this is headline news - it would be if it was a downwards prediction...

What are the chances it is even mentioned? :angry:

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Guest The_Oldie

Quick I had better get over to the BBC site to check that this is headline news - it would be if it was a downwards prediction...

What are the chances it is even mentioned? :angry:

Never mind what they say on their website, it's what they say on the television that affects sentiment the most.

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In Spooks the other day one of the characters mentioned Hutton and implied how it had been used to gag the BBC. I think now that Blair is on his way out, and Brown is no longer looking a certainty, the auntie worm may start to turn. Who knows what is going on behind the scenes. Reid or someone else may gathering support, and so trashing Brown and his illusion of a miracle economy, may be part of the plan to snatch the reigns of power. If the economy goes down the pan, the new leader (provided it's not Brown) can hold his hands up and say 'Not my fault mate, it was Blair and Brown, give me a chance to sort out their mess'. They could even let the MPC hike and hike, and again blame Brown as it was his policy to have an 'independant' rate setting committee. This could all play well for us as papers like the Guardian may go bearish too, and once the media goes bear the market will drop, and as long as they've got someone to blame, and that someone is no longer powerful, it doesn't matter to them as they will be OK.

Edited by HovelinHove

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IMHO, its propaganda, bearish news to cool the market, if the market is too bullish you get ALOT of bearish articles, if the market cools the propaganda machine goes into overdrive, prices can only go up. Propaganda is being used to balance the market and try and keep prices level...

These are the projected interest rates (the market could be wrong)

http://members.cox.net/dmrc/InterestRates/UK_Rates.htm

would love interest rates to go to 6%, but IMHO, they should already be 6%, CPI can be manuiplulated, and we will get poorer and poorer....

Edited by moosetea

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Guest prudence

Surely not 6% that would be unprecedented - rates have never got that high before!

I presume you're being sarcastic in which case it is better to know some very basic maths before doing so. It's very simple, really. People who had to borrow high income multiples to buy a property when IR were at 3.5 or even 4 percent would have seen their repayments increase by 50 percent or more if that were to happen. That is why what is important is by what proportion one's mortgage payments are increasing, not so much what the actual rate is. Maxed out to buy at 3.5 percent, IRs at six percent -disaster for many!

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I nearly dropped my toast when I heard them say that on the BBC!

And I thought debt was good for the economy and we weren't meant to worry about it? At least that was last weeks take on the BBC! ;)

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Oh dear. I hope Casual Observer wasn't watching. We wouldn't want him choking on his cornflakes.

Funny really, old casual was only saying the other day that rates would peak at 5.25%, prediction's, how they can be so wrong? :lol:

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IMHO, its propaganda, bearish news to cool the market, if the market is too bullish you get ALOT of bearish articles, if the market cools the propaganda machine goes into overdrive, prices can only go up. Propaganda is being used to balance the market and try and keep prices level...

These are the projected interest rates (the market could be wrong)

http://members.cox.net/dmrc/InterestRates/UK_Rates.htm

would love interest rates to go to 6%, but IMHO, they should already be 6%, CPI can be manuiplulated, and we will get poorer and poorer....

Propaganda is right, but I wonder whether there is a different agenda.

This could be the BoE trying to prepare the markets for more hikes. It was interesting that they concentrated on non fuel items as the main drivers of inflation now and I think that the fact that there was an ex-MPC member on the peice is very significant.

The BoE could be trying to avoid more surprise surprise headlines. I would luve to be a fly on the wall at that MPC meeting today.

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IMHO, its propaganda, bearish news to cool the market, if the market is too bullish you get ALOT of bearish articles, if the market cools the propaganda machine goes into overdrive, prices can only go up. Propaganda is being used to balance the market and try and keep prices level...

These are the projected interest rates (the market could be wrong)

http://members.cox.net/dmrc/InterestRates/UK_Rates.htm

would love interest rates to go to 6%, but IMHO, they should already be 6%, CPI can be manuiplulated, and we will get poorer and poorer....

Hey I like that graph. It clearly shows IRs peaking early next year before dropping down - perhaps this will be to try and encourage and energise the housing market which is going to be crashing at that point!

Edited by Ethel

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But why is 6% so strange or worrying, i mean it is as close as dammit to the log term nominal, so not high nor low, about right.

God help the ones who struggle at 6%, if we ever get to 7%, which is a possibility, we could see house keys being handed back in there droves?

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I saw this as well, can't remember the exact figures but the guy they were talking to a "Teacher" with what was obviously quite a large mortgage. They said that for each 1/4 percentage point rise in the base rate he would have to find an extra £147 a month. If interest rates ended up at 6% he would need an extra £300 a month.

Obviously the BBC had found a bad example to highlight the pitfalls. I just wondered if he had bought under a key worker scheme.

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More rates rising stuff from the BBC, this time on the web site :o

http://news.bbc.co.uk/1/hi/business/5406018.stm

I particularly like the finishing paragraph.

"With such mixed messages in the economy and inflation still above target, the MPC will have to decide whether to raise rates sooner rather than later."

Does not level much room for a cut anytime soon does? :D

Edited by FTBagain

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I nearly dropped my toast when I heard them say that on the BBC!

And I thought debt was good for the economy and we weren't meant to worry about it? At least that was last weeks take on the BBC! ;)

Dont forget it is different this time.....

:huh:

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IR will peak, house prices will dip - TB leaves office - takes the blame with him (boo, hiss)

GB is installed as PM and starts to lower IR going towards the next election (what a fantastic guy) and house prices rise again

It just a big PR exersize....

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I saw this as well, can't remember the exact figures but the guy they were talking to a "Teacher" with what was obviously quite a large mortgage. They said that for each 1/4 percentage point rise in the base rate he would have to find an extra £147 a month. If interest rates ended up at 6% he would need an extra £300 a month.

Obviously the BBC had found a bad example to highlight the pitfalls. I just wondered if he had bought under a key worker scheme.

MB,

Are you sure it was £147 for each 0.25% rise in the base rate?

This would equate to a £705,600 mortgage (£705,600 x 0.0025 / 12 = £147 pcm unless my maths is wrong!)

That's some salary multiple!

M21er

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This 6% spin could have been deliberatley leaked (by th eBOE) to frighten people - then the BOE would not have to actually make the necessary increases.

HAL

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This 6% spin could have been deliberatley leaked (by th eBOE) to frighten people - then the BOE would not have to actually make the necessary increases.

HAL

The public WILL call their bluff IMO - they are onto a loser here....

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I saw this as well, can't remember the exact figures but the guy they were talking to a "Teacher" with what was obviously quite a large mortgage. They said that for each 1/4 percentage point rise in the base rate he would have to find an extra £147 a month. If interest rates ended up at 6% he would need an extra £300 a month.

Obviously the BBC had found a bad example to highlight the pitfalls. I just wondered if he had bought under a key worker scheme.

A relative of mine has a £340,000 mortgage and the last quarter percent IR rise put their repayments up by £52 a month. So pro-rata this teacher person must have about a million pound mortgage. <_<

Are you sure it wasn't £147 a year extra?

EDIT: sorry somebody got there before me!

Edited by Ethel

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A £340'000 repayment mortgage would have monthlies of approx £1890, if they were paying 4.5%.

At 5%, they would go up to £1989. An extra £100 a month, or £1'200 a year.

If we were talking £147 on those sort of figures, no one would give a damn about IRs. Your friend must have borrowed considerably less than £340K, are you sure that is not just what the house is 'worth'?

Edited by tahoma

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A £340'000 repayment mortgage would have monthlies of approx £1890, if they were paying 4.5%.

At 5%, they would go up to £1989. An extra £100 a month, or £1'200 a year.

If we were talking £147 on those sort of figures, no one would give a damn about IRs. Your friend must have borrowed considerably less than £340K, are you sure that is not just what the house is 'worth'?

Not according to the BBC mortgage calculator:

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Enter £340,000 mortgage over 25 years at 5% - repayment is £2010.31 a month

Change IR to 5.25% - repayment is £2060.98 a month

Difference of about £50 - like I said.

Of course I'm sure they are not paying base rate but the difference is the same whatever two rates you use that are 0.25% apart.

EDIT: BTW the house is worth about £750k - £800k. Yes I know, lucky ba$tard.

Edited by Ethel

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  • 315 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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