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Ash4781

Nationwide August Hpi Likely Down To 8.9% Annual Rate

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http://business.scotsman.com/banking.cfm?id=1519972007

Figures from the Nationwide this week on house prices for August are likely to show a beguilingly modest fall in the annual rate of house price inflation, from 9.6% to 8.9%.

My view is that the first cut, from 5.75% to 5.5%, will come in November and that further reductions to calm persistent febrile conditions in markets will take the rate down to 5.25% in the first three months of next year. Even this, however, is unlikely to prevent GDP growth slowing from its current 2.9% rate to 2% for 2008.

And the missing elephant in the room? A credible policy to combat inflation pressures which are set to come from a weaker pound, high oil prices and the rising costs of foodstuffs. Indeed, it is hard to see where inflation will play any effective part in decision-making while the confusion over monetary policy regulation - and who is really in charge - persists. And it appears for now to be the Government through its dramatic underwriting of Northern Rock depositors, no matter how that the Bank and the FSA may protest their "independence".

Both in the UK and US, short-term market approval has been bought at the cost of medium-term stability. So, not an end to market volatility, then. What we have seen, I fear, is just the end of the beginning.

Worried about this inflation in the longer term.

Edited by Ash4781

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Figures from the Nationwide this week on house prices for August are likely to show a beguilingly modest fall in the annual rate of house price inflation, from 9.6% to 8.9%.

My view is that the first cut, from 5.75% to 5.5%, will come in November and that further reductions to calm persistent febrile conditions in markets will take the rate down to 5.25% in the first three months of next year. Even this, however, is unlikely to prevent GDP growth slowing from its current 2.9% rate to 2% for 2008.

It's depresing isn't it? October 2007 will be August 2005 all over again. McStalin will instruct the "independent" MPC to cut by .25 in October. Lomax and the other place people will not need to be told twice. However, King will vote against it again because he knows that not only is the CPI fiddled - he knows (as Greenspan has so rightly recently said) that this would be inflationary suicide. Oil prices UP, food prices UP etc. The MPC would then have to cut again as CPI (if it's not fiddled) flies up over 3 per cent in the winter.

One more point on the BoE's so called independance. It seems to me that whenever we get two months consecutive negative HPI - McStalin "orders" the MPC to cut to save his miracle. However, in the US we had at least one year of negative HPI and Ben has only just cut. Unfortunately, Gordon knows that he cannot afford to give his bank as much independance as America's as the UK's problems are twice as big as Ben's.

Brown now has two choices:

1) Calls an election this week at the party conference for the end of October before HPC hits the fan. If he gets re-elected he can blame "outside influences" (the Sun reading sheeple will believe him). If Cameron gets in then he could actually be relieved to be out so someone else can clear up the mess.

OR....(most likely)

2) He will instruct the MPC to cut in October and November (just in time for Christmas). By doing this he can get another few months of voters hitting the credit card and MEWing. As long as he calls the election for April he may be ok.

It sure is a tough decision and I wouldn't like to be McStalin right now.

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It's depresing isn't it? October 2007 will be August 2005 all over again. McStalin will instruct the "independent" MPC to cut by .25 in October. Lomax and the other place people will not need to be told twice. However, King will vote against it again because he knows that not only is the CPI fiddled - he knows (as Greenspan has so rightly recently said) that this would be inflationary suicide. Oil prices UP, food prices UP etc. The MPC would then have to cut again as CPI (if it's not fiddled) flies up over 3 per cent in the winter.

you forgot, mortgages down!

will the majority, with mortgages care if inflation goes from 3% to 5% IF their mortgages go down by 10%? (a cut of 0.5%)

if i where a mortgage holder i woul not care if inflation was up, so long as interest rates going down, the problem is when both inflation is going up along with interest rates.

as much as i dont like it, cutting makes perfect sense politicly

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you forgot, mortgages down!

will the majority, with mortgages care if inflation goes from 3% to 5% IF their mortgages go down by 10%? (a cut of 0.5%)

if i where a mortgage holder i woul not care if inflation was up, so long as interest rates going down, the problem is when both inflation is going up along with interest rates.

as much as i dont like it, cutting makes perfect sense politicly

Would they pass on a all of the 0.5% cut though ?

Edited by Ash4781

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you forgot, mortgages down!

will the majority, with mortgages care if inflation goes from 3% to 5% IF their mortgages go down by 10%? (a cut of 0.5%)

if i where a mortgage holder i woul not care if inflation was up, so long as interest rates going down, the problem is when both inflation is going up along with interest rates.

as much as i dont like it, cutting makes perfect sense politicly

Don't be a turd.

Of course you care. Inflation and wage inflation are different things. If inflation goes to 15%, wage inflation will not be following it and you'll be screwed.

If wage inflation even hinted at following it the job losses would be huge.

Turd. You have been here long enough to know that surely?

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Sounds like this guy has had an early viewing of the figures - anyone know what a YOY fall to 8.9% equates to in terms of MOM ? - this is the figure that the sheeple look at. could we see 'House Prices Fall' headlines this week ? Coz if we do I shall posting copies in all the local EAs windows ( except the one where the wife works of course !)

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Of course, when house inflation was shooting up at 25% a year, we were getting cuts.

Now it may come down, we will be getting cuts.

Fckued logic or what!!

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Brown now has two choices:

1) Calls an election this week at the party conference for the end of October before HPC hits the fan. If he gets re-elected he can blame "outside influences" (the Sun reading sheeple will believe him). If Cameron gets in then he could actually be relieved to be out so someone else can clear up the mess.

OR....(most likely)

2) He will instruct the MPC to cut in October and November (just in time for Christmas). By doing this he can get another few months of voters hitting the credit card and MEWing. As long as he calls the election for April he may be ok.

It sure is a tough decision and I wouldn't like to be McStalin right now.

Three choices, he could step down as PM, with a message to the British people stating he's an incompetent useless oaf. Did anyones read last week he intended to boycott the Portuguese summit if Mugabe attended, the worlds response was Gordon who.

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Sounds like this guy has had an early viewing of the figures - anyone know what a YOY fall to 8.9% equates to in terms of MOM ? - this is the figure that the sheeple look at. could we see 'House Prices Fall' headlines this week ? Coz if we do I shall posting copies in all the local EAs windows ( except the one where the wife works of course !)

http://www.nationwide.co.uk/hpi/review.htm

YOY for Aug '07=9.6 August 06=0.8%. 9.6-.08=8.8+0.1=8.9%

MOM Sept 07 +0.1%?

Edited by Buffer Bear

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Im confused as to how they can produce a report for the month of August and have it ready for release at 7am on the 30th of the same month...

The embargoed notice indicates that it is actually prepared before that time as well....

Would be nice if they indicated what were the actual dates that this report got its data from!

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