Saturday, January 20, 2007

Markets price in interest rates of 5.75% by June 2007

Traders bet on rate rises after strong Christmas sales period

Another Gabriel Rozenberg article which highlights gathering economic clouds. A bunch of so called experts are pricing in 5.75% interest rates by June 2007 because of the strength of Christmas 2006 sales. I'm taking a dim view of so called experts but I feel the mood of the media is swinging towards higher interests rates. How long before reports of repossessions?

Posted by talking rot @ 09:09 PM (514 views)
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4 thoughts on “Markets price in interest rates of 5.75% by June 2007

  • Reports of repossessions? TR, those were available in June LAST year.

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  • “The only dovish piece of news was a further sign that the housing market may be cooling. The British Bankers’ Association said that net mortgage advances had dropped to £5.8 billion in December, from £6.7 billion in November.”

    I know people have asked this before but how much of this is MEWing and people positioning themselves with a new fixed rate?
    Is this information available?

    That aside bring on a 0.5% hike in Feb and be done with it.

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  • Headmelter – ‘net mortgage advances’ means new loans less repayments made, so remortgages for the same amounts drop out of the equation.

    Whether the net advances are MEWing or purchases doesn’t make a lot of difference – it still means new money flowing into the system. Perhaps MEWing is perhaps worse, because it is more likely to be spent on the new car or a new suite, but maybe it’s as likely to be a foreign holiday or even a property abroad, neither of which add to domestic inflation. Not sure anyone has the info about how the money is spent, to work it all out.

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  • Whoops, Paul

    You’re right of course. I meant to say “How long before reports of repossessions make the mainstream media THIS YEAR.”

    Thanks

    TR

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