Thursday, June 7, 2007

More good news for the cause

Housing market starts to slow

Artical goes over old ground but still nice to see. Buyer can not afford to pay current market prices and exisitng owners can nt afford to trade up. Someone should the estate agents this!

Posted by speculatorone @ 06:37 PM (565 views)
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6 thoughts on “More good news for the cause

  • dohousescrashinthewoods says:

    Titanic’s looking a bit low in the water, but don’t worry, we’ll soon be on our way.

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  • At least one further rise is still on the cards,” said Stephen Thornton, economist at the Royal Institution of Chartered Surveyors (RICS).

    “Indeed, by not raising interest rates now the Bank risks having to push rates to six per cent by the end of the year.”

    Ewww. That’s a biggy. An estate agent admitting that the BofE kipping on the job may now generate the need for excessive hikes later.

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  • Someone should TELL the estate agents this….

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  • talking rot says:

    I respect Paul’s comments but I don’t think, on this occassion, he’s right. Well, he is right that the BoE SHOULD put interest rates up to 6% by the end of the year, but I don’t think that they will. The CPI inflation rate forecast 2-years from Dec 07 will be in a range with the median at about 2%. Whether we think the CPI is an accurate measure of real inflation or not, it is the tool the BoE is mandated to use. Therefore interest rates will be 5.75% at the end of 2007.

    Look for cuts in the New Year.

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  • TR, if you agree that IR’s should be higher and that you think there will be 5.75 by yrs end, then cuts, you must be assuming that this will stoke up future inflation problems and future higher rates. So, it begs the question, when do you see you foreseen loosening having an inflationary effect and, when and how high will they peak on the inevitable second round of tightening? Or do you think that a second round of tightening would be unecessary? The BOE’s cowardice in the past makes your suggestions an outside possibility, so I reckon it’s worth prying.

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  • TR…The CPI inflation rate forecast is the BoE’s own, or at least produced by some of their cronies, isn’t it? In which case it’s the same forecast they have to keep revising every time – that same forecast from a few months ago said oil prices would be $40 a barrel, I believe, which hasn’t happened of course. That same forecast didn’t anticipate CPI hitting 3.1% a couple of months ago either, else they would have raised rates sooner. There forecast is consistently wrong, of late at least.

    There seems to be a general bias in the BoE’s forecast that, “things will probably get better” with the only problem being that, so far, “things” keep failing to do this. Fundementally, their forecasts would only be proved right if they took really decisive action – as they keep failing to take the necessary steps, the forecast keeps getting revised up every month. I think the odds are very strong that their failure to act this month will mean another upward revision in the forecast next month, so I’d go along with Paul here.

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