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Uk Interest Rates Forecast To Fall To 5% By September 2008

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http://www.marketoracle.co.uk/Article2183.html

they forecast a drop of rates to 5% but this is based on very bearish views about the housing market (drop of 15% over next 2 years) and economy.

that sounds about right - think it will come down slightly even without consideration of the housing market, should come down nicely in time for re mortgage next year ;)

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that sounds about right - think it will come down slightly even without consideration of the housing market, should come down nicely in time for re mortgage next year ;)

lol I was thinking the exact same thing

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that sounds about right - think it will come down slightly even without consideration of the housing market, should come down nicely in time for re mortgage next year ;)

Keep telling yourself that.

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Lets see now ... oil at $84 a barrel and likely to rise, food prices rising and likely to rise significantly in the coming months, China exporting inflation and not deflation - yes I can see how you can argue the case for a rate cut ! Why do these muppets who argue for rate cuts never consider inflation - its always about GDP and the housing market - oh because thats what Gordo does I forgot - he just waives his might pen and inflation vanishes.

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In my opinion rates are on hold for the time being, the BoE has said before that CPI would fall to this level but inflation over the medium term is likely to rise. As Bearfacts says oil, food and the Chinese likely to be exporting inflation will start to have an impact on the Great British consumer, oh, and double digit M4 growth dosen't help either.

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Just look at the inflation chart in the article. The low was 2000, and since then the trend has been, err...up. I wonder if that coincides with the commodities boom that we are still in the early stages of?

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I/R may be down 3 x . 25% in the next 15 months or so. However with all the inflation data coming downsream at us they could just as easily be the same or up a couple of notches to 6.25%.

Interest rates are now not the key critical factor (reducing I/R in the US will not impact whats uffollding in the property market there. That Tankers course was set in 2003 to 2005). It is the ability of discretionary buyers to borrow on terms they can meet/afford and the ability of 100's of thousands to re-mortgage themselves out of trouble that will decide the fate of the UK market. The US and therfore the UK ain't seen nothing yet regarding the fall out from sub-prime and other, poorly risk priced lending of the last six years.

If Uk property prices fall 15% over a two year period that will make the last time 1989 to 1995 look like a total bull fest. Then nationally the stats show prices fell circa 17% but that meant that some fell 5% but hundreds of thousands fell 30 to 50%.

Last time arround BTL was an esoteric preserve, this time every man, his hairdresser and shoe shine boy is in and many late to the game. Last time people battled tooth and nail to hold onto their homes, this time there won't be the same need/emotional attachment. Many will be simply be drained by years of financial strain place upon them by Gordon Browns Tax increases, real increases in the cost of living and their own foolishness in personal spending/debt accumilation and naivity in thinking we've been operating outside of the real world. Many people under 40 yers of age are in for some serious lesons in life/finance/economics.

Take a look arround you, every one with BTL, holiday homes abroad, kids that have bought in the last 3 years or so or who are just about to do so are cra££ing themselves.

'Not out of the Woods?' We're just entering!

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Pablo-silver or lead?

The inflation is shaping up to be potenitally far more murderous on fiannces than non-inflationary interest rates.

What a conundrum. Not. Should never have been allowed to get into this situaiton in the first place.

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I/R may be down 3 x . 25% in the next 15 months or so. However with all the inflation data coming downsream at us they could just as easily be the same or up a couple of notches to 6.25%.

Interest rates are now not the key critical factor (reducing I/R in the US will not impact whats uffollding in the property market there. That Tankers course was set in 2003 to 2005). It is the ability of discretionary buyers to borrow on terms they can meet/afford and the ability of 100's of thousands to re-mortgage themselves out of trouble that will decide the fate of the UK market.

'Not out of the Woods?' We're just entering!

Good post Pablo.

Indeed , in Japan you can get a mortgage with an interest rate of 1.6% but

the housing market there is dead in the water.

Maybe by Sept. 2008 we'll see a 0.75% cut in bases rates but we'll be paying

10 to 20% more for our Russian gas, Saudi oil and Chinese clothes.

Oh goody, I can't wait !!

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Pablo-silver or lead?

The inflation is shaping up to be potenitally far more murderous on fiannces than non-inflationary interest rates.

What a conundrum. Not. Should never have been allowed to get into this situaiton in the first place.

For me this is what it is all boiling down to.

However much CPI is fiddled with, eventually the consumer is going to get hit with non discretionary price increases coming at them from several fronts.

There's not much point in saving £50 on the mortgage each month when your household bill has gone up by £60.

Found Greenspan's comments this week most amusing ... when questioned on todays implications of his infamous "put" he was most dismissive and Bernanke is doing right thing now in dropping ... but expect global rates of 10% plus in the future ... like you say what a conundrum.

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If Uk property prices fall 15% over a two year period that will make the last time 1989 to 1995 look like a total bull fest. Then nationally the stats show prices fell circa 17% but that meant that some fell 5% but hundreds of thousands fell 30 to 50%.

'Not out of the Woods?' We're just entering!

Also, during the last crash student loans did not exist. These loans are a burden that banks will consider when lending in the future.

The next crash will make the last crash look like a piddly correction, just like this boom made the last boom look almost non existent.

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that sounds about right - think it will come down slightly even without consideration of the housing market, should come down nicely in time for re mortgage next year ;)

By which case you'll be in negative equity and shopping for an SVR.

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Also, during the last crash student loans did not exist. These loans are a burden that banks will consider when lending in the future.

The next crash will make the last crash look like a piddly correction, just like this boom made the last boom look almost non existent.

yeah they did.

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Also, during the last crash student loans did not exist. These loans are a burden that banks will consider when lending in the future.

The next crash will make the last crash look like a piddly correction, just like this boom made the last boom look almost non existent.

Student loans were introduced in 1990 but were only for a maximum of £600 or so.

Its only since tuition fees were introduced that they have had a serious impact on the expenses of recent graduates.

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