Thursday, January 31, 2008

Coming to the UK soon… There’s nowhere to hide property bulls! Sell up now or be damned!

Eurozone inflation at new record

Eurozone inflation surged to a new record in January at 3.2%, official data showed. Consumer prices are now growing at their quickest rate in the 15-nations eurozone since records began in 1997. The rate is much higher than the European Central Bank's target of 2%.

Posted by tyrellcorporation @ 02:16 PM (1117 views)
Please complete the required fields.



8 thoughts on “Coming to the UK soon… There’s nowhere to hide property bulls! Sell up now or be damned!

  • when are the BoE going to admit that inflation in the UK is the same, if not higher, than the Eurozone, especially now they have decided on a crash diet for sterling?

    Reply
    Please complete the required fields.



  • David Smith's Sub Prime. . . says:

    I say with all certainty as an esteemed economist that we should lower interest rates…

    Well Rupert tells me to say this.

    Reply
    Please complete the required fields.



  • “Official” inflation will head north this year (again). The BoE will let not target inflation, they will try to limit its rise by lowering rates slowly. The lower IR’s will not fuel extra froth into the housing market, why? IMHO….

    1) Inflation will hit people in the pockets, cash to survive becomes more important than cash to buy a property at overly inflated prices.
    2) Inflation will hit peoples sentiment, as goods increase in price, Joe Public will be less inclined to renew the lease on the X5.
    3) The banks have already become more selective to whom they lend to and at what risk, i.e… what LVR.
    4) Essentially, the banks are controlling money/credit supply now and are in effect having the same impact as the BoE raising IR’s. The BoE know this hence the reason why they feel inflation can ride high for the short term. Inflation will hit Joe Public and lower base IR’s may encourage the corporate banks to start trading amongst each other again, therby helping to stave off a recession.

    Reply
    Please complete the required fields.



  • We can look at GDP growth figures and energy consumption figures to see where price inflation is going. As a good approximation, and one that has held for at least the last 50 years, Annual Price Inflation = Annual GDP Growth – Annual Growth in Energy Consumption

    Reply
    Please complete the required fields.



  • “The ECB faces the tough challenge of controlling inflation, which can be done by raising interest rates, at a time when the economy is slowing.

    The problem is similar in the UK. ”

    This is perhaps the ONLY acknowledgement you will ever see on the BBC that inflation might just need to be considered when rate decisions are being made!!

    Reply
    Please complete the required fields.



  • housing carbuncle says:

    Raise interest rates all round, the logical solution to the problem of inflation, by at least 2%.

    Reply
    Please complete the required fields.



  • @paul: If we’re a nation of home-owners to the tune of over 70%, then 7 out of 10 journalists own a home… 😉 The BBC are doing a great job filling the press about MPs alleged financial fiddles so that all Brown needs to do is add a bit of spice with the odd announcement from central Government and that’s the bad news about the precarious state of affairs nicely buried. I think Northern Rocks sale will still be a flop as noone is interested in the “bonds” and am waiting for the volley of bull about this over the next few days. I hope and expect the EU to complain about the fudge to keep this off balance sheet and expose it fully.

    Reply
    Please complete the required fields.



  • Maybe I am not following your logic… but if Inflation is up, surely it’s not a good time to sell!! I’d rather have huge debt in period of inflation than savings…
    I am renting but I am thinking about buying in the near future. I will wait until prices go down a bit, choose my house, negociate and buy. I will only do that if I think that the MPC has dropped its mandate to target inflation. This is not unlikely if we face recession. The MPC may well prefer to boost the economy and worry about inflation later, much like the US. I am not sure if this will happen but I am certain that the MPC will be under huge pressure to do so. If they do, you may want to consider buying houses again. (even if they are overpriced)

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>