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Guest Charlie The Tramp

A possible .25% reduction before the election, and then on the way up.

As UK base rates increase so will the ECB, US rates will lead the way.

The days of cheap borrowing will be over for many years.

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Current short term forecast is flat as the first reply states.

I doubt rates will rise above 5%.

If we don't want a recession I can't see BoE increasing rates this year significantly. My prediction is a max of 4 quarter point changes this year ending up at 4.25 - 4.5%. Furthermore, can we afford to have the pound any stronger vs the dollar? It's a tricky one whether the weakness vs the euro or the strength vs the dollar will win out.

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Current short term forecast is flat as the first reply states.

I doubt rates will rise above 5%.

If we don't want a recession I can't see BoE increasing rates this year significantly. My prediction is a max of 4 quarter point changes this year ending up at 4.25 - 4.5%. Furthermore, can we afford to have the pound any stronger vs the dollar? It's a tricky one whether the weakness vs the euro or the strength vs the dollar will win out.

What happens if the US dramatically increases rates?

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Hello,

Anyone have an idea about what's going to happen this month? Sorry if I've missed the general forecast already.  :)

Probably no change for the next couple of months.

On the home front the BoE will probably wait and see what the christmas results were, and what is going to happen to the housing market in the spring before deciding.

On the currency thing.. no idea. Can anyone explain how interest rates affect exchange rates etc.. or post a link to some easy reading?

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I want to know why when HP inflation was booming, the BOE said it's not their place to control it.

Now, with HPI deflating, everyone (with a vested interest) seems to think that the BOE will keep an eye on it and reduce rates if required?

I understand that a HP crash may result in recessoin in general, but we're doomed anyway what with the 1 zilbion pounds worth of personal debt or whatever the crazy figure is!

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Seems to me they will go up another 0.25% and then probably down 0.25% by the end of the year (i.e. back to where they are now). The margin of error is probably about 1% either way though!

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"``What we're going to see is a complete seizing up of activity in the housing market this year and a slowdown in consumer spending,'' said Ian Stewart, chief European economist at Merrill Lynch and Co. in London, before the report. That slowdown will be enough to prevent interest rates rising again, he said. "

Seems Merrill agree with you BT. No change for a while.

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ING has this prediction this morning of a 25bp cut in the spring:

The UK has just released several weak figures. The December CIPS manufacturing

survey has fallen more than expected to 53.7 from 55.0 in November. The market

had been forecasting a reading of 54.4. Output fell to 54.7 from 57.1 although

new orders rose to 55.5 from 55.2. However, the drop in employment to 48.7 from

50.9 is worrying. This takes it back into contraction territory and is the

lowest reading since July 2003. It also adds to the gloom surrounding the

outlook for the household sector, which is further reinforced by Bank of England data showing the lowest number of mortgage applications since September 1995

and the lowest mortgage lending growth since June 2002. Consumer credit growth

is also slowing sharply with borrowing totalling GBP1.378bn in November versus

expectations of GBP1.6bn. We remain of the view that the Bank of England will

respond to the weakening housing market (we expect prices to fall around 10%)

and the related slowdown in consumer spending. Indeed, the latest MPC minutes

suggest that the committee is starting to react to the weaker data, which could

see a 25bp cut as early as the spring.

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A possible .25% reduction before the election, and then on the way up.

As UK base rates increase so will the ECB, US rates will lead the way.

The days of cheap borrowing will be over for many years.

That's a bit of a change there CTT. You were talking 5.25% by spring a short while ago. I remember we agreed it would depend a lot on Christmas.

Here's an article I found a moment ago:

http://www.thisislondon.co.uk/news/busines...d396777?source=

Credit cards show sales slump

Sean Poulter, Daily Mail,

4 January 2005

AFTER a disappointing Christmas, High Street stores may be on course for their worst January sales for 25 years. Although John Lewis has reported upbeat revenues in the first three days of its discount sales, statistics from the credit card industry have cast a shadow over the retail sector.

The British Retail Consortium is expected to report that shops experienced, on average, a 2% fall in like-for-like sales in December compared with 2003. Many were counting on a post-Christmas spending spree to boost their sales. But, according to MasterCard and Maestro, the credit and debit card company which accounts for a quarter of all retail transactions, many shoppers stayed away.

On Boxing Day, retail sales on its cards totalled £36m, down 1.6% on 2003. On December 27, they were 5% lower than the previous year at £97m. MasterCard Europe chief executive Paul Lucraft said: 'Consumers appear to have been cautious in the run-up to Christmas and the restraint continued once Christmas Day was over.'

The first detailed evidence of how Christmas has gone should come from fashion chain Next later this week ? though preliminary indications from Woolworths do not look good. Next is understood to have had a torrid Christmas and analysts have suggested that the best the chain could hope for was a 'solid' and 'acceptable' performance. Other retailer have had a far more difficult time, with serious questions raised about Marks & Spencer, House of Fraser, Allders, JJB Sports, WH Smith, Dixons, Boots, Clinton Cards, French Connection and Benetton.

The big winners, meanwhile, appear to have been the supermarkets, despite fears that they could be hit by long queues as a result of the introduction of new chip and Pin technology.

These early fears appear to have been unfounded ? analysts had worried that people might not have been able to make purchases by card unless they had a new credit or debit card that can be authorised with a four-digit Personal Identification Number (PIN) rather than a signature. In fact, in most cases people can continue to use their signature. However, new checking procedures to ensure cards are not stolen will slow the process of paying.

Business and IT analysts PA Consulting Group claim that chip and Pin will 'have an initially detrimental impact on retailers'. It said it was realistic to expect the average queuing time for a supermarket to increase by 59% ? up from just under five minutes to nearly eight minutes.

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Guest Charlie The Tramp
That's a bit of a change there CTT. You were talking 5.25% by spring a short while ago. I remember we agreed it would depend a lot on Christmas.

Sorry TTRTR

There was no talk of an early election ( possibly February ) when we both made our predictions, or the fact the Magician was heading towards a couple of little problems. Read the MPC minutes, could not see where all the joy was on a possible rate cut, and they held rates again in December. Just a feeling that there will be a little back scratching going on before the election, maybe not a cut but still on hold. Just don`t trust these buddies.

I will stick by this prediction around 5.75% late spring 2006, and at least 5% by late summer this year. I wait with interest the spending up to the end of January on the CCs. Lakeside and Bluewater were gridlocked for miles the Monday after Christmas, and Harrods are predicting their best sale ever. <_<

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  • 441 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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