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Sterling Affected By Housing Data

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Taken from Reuters:

Soft housing data keeps sterling off 3-mth highs 8:21am GMT

LONDON, March 11 (Reuters) - Sterling retreated from three-month highs versus the dollar on Tuesday after a UK house price measure fell to its lowest since the market crashed in 1990, boosting the case for further interest rate cuts.

My observations. Implications are that if housing data is bad (ie fall in market values and sales) there will be a need to cut the BoE base rate and thus the value of sterling falls. With the belief there may be a rate cut on the way the stock market, more often than not, seems to rally.

However, why do these economists not see the other side of the story in that imports will be more expensive if the value of the pound falls.

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Taken from Reuters:

Soft housing data keeps sterling off 3-mth highs 8:21am GMT

LONDON, March 11 (Reuters) - Sterling retreated from three-month highs versus the dollar on Tuesday after a UK house price measure fell to its lowest since the market crashed in 1990, boosting the case for further interest rate cuts.

My observations. Implications are that if housing data is bad (ie fall in market values and sales) there will be a need to cut the BoE base rate and thus the value of sterling falls. With the belief there may be a rate cut on the way the stock market, more often than not, seems to rally.

However, why do these economists not see the other side of the story in that imports will be more expensive if the value of the pound falls.

The economists do see the other side of the story. But this is political and I believe inflation will be allowed to rise in the "short term". That is not an obvious or immediate vote loser and can be blamed on others. But voters not being able to pay their mortgages, repocessions and hpc are all immediate vote losers. Nulabour know this and will cut rates. As I've said before, the link between BoE base rates and lending rates is broken, which is not generally understood and this gives NuLabour a great excuse to blame the greedy banks for not passing on the rate cuts. They are fully paid up members of the "Blame Everyone Else Club".

Edited by Harold Bishop

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The public are sheep. Idiot sheep. The absolute only thing in the world they care about is rate cuts. They are bent on the belief that cuts will get prices rising again. You could put the fees on mortgages up to £1 million and they would still confidently proclaim that a 0.25% cut will start things off again. I hear it every day.

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Surely if the value of sterling starts to fall that will mean higher imported food prices, oil, raw materials for manufacturing etc. Not everyone has a mortgage or owns their own homes but we all have to eat!

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Sterling and the housing market are paired like siamese twins. They went up together and they will go down together.

As of today, sterling is soaring due to today's RM "bouyant" HPI report and Government Data showing HPI remains "robust." The markets are a;lso reassured that, if there are any falls, they are along the lines being reported by Haliwide: fractions of a percent (0.3% etc.) and nothing compared with the mega rises of the Brown miracle years.

All the more to shock the market when the cover up is exposed by damning evidence of reposessions, higher levels of builder bankrutpcies, closing EAs and massive City layoffs in the wake of the world's worst financial crisis since the 1930's.

Waging the HPI miracle proganda war is Brown's number one obsession.

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  • 293 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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