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Another global IR drop. 0.5% on the cards.
Realy
Posts: 1,017 Forumite
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What are they going to do when they run out of scope to cut further?
And there are already problems emerging with governments trying to sell bonds to raise money:
http://www.ft.com/cms/s/0/bcebf04e-a48f-11dd-8104-000077b07658.htmlAustria, one of Europe's stronger economies, cancelled a bond auction yesterday in the latest sign that European governments are facing increasing problems raising debt in the deepening credit crisis.The difficulties of Austria, which has a triple A credit rating, highlights the extent of the deterioration, which saw benchmark indicators of credit risk such as the iTraxx index hit fresh record wides yesterday.
Austria is the fourth European country to cancel a bond offering in recent weeks amid growing worries over its exposure to beleaguered eastern European economies such as Hungary.
Given that the government are promising to 'borrow big' to spend their way out of this crisis and bail out everyone in sight, where do you think this is all going to leave us?--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
What are they going to do when they run out of scope to cut further?
And there are already problems emerging with governments trying to sell bonds to raise money:
http://www.ft.com/cms/s/0/bcebf04e-a48f-11dd-8104-000077b07658.html
Given that the government are promising to 'borrow big' to spend their way out of this crisis and bail out everyone in sight, where do you think this is all going to leave us?
Well your link tells you why they had to cancel it.
If the goverment are taking on more debt at least it is cheaper to service.;)
Lets hope they got it on a BOE BR tracker.:D
I don't know where it will leave us I doubt you do or anyone else does.
Anyone can profess they know but at best it is a guess and at worst a complete stab in the dark.0 -
Well your link tells you why they had to cancel it.
If the goverment are taking on more debt at least it is cheaper to service.;)
Lets hope they got it on a BOE BR tracker.:D
I don't know where it will leave us I doubt you do or anyone else does.
Anyone can profess they know but at best it is a guess and at worst a complete stab in the dark.
Just as well the UK is so well placed to borrow then ... except that there have already been rumblings about treasury bonds not finding a home:
http://www.ft.com/cms/s/0/c0a3a61c-9b18-11dd-a653-000077b07658.html?nclick_check=1
Now, if they can't get bonds sold as it is - doesn't leave them in a great position does it? They can either spend less (unlikely), raise taxes considerably (they'll try to whack up stealth taxes for sure but I can't see it being enough), have to offer better sterling interest rates (they don't want to do that) or even 'print money' (quite possible IMO).The record issuance of gilts from the UK government in the coming months could struggle to find enough demand and so lead to the first uncovered auction for more than six years, officials admitted yesterday.
There has been no uncovered auction - where some gilts are left unsold - since 2002, according to Robert Stheeman, chief executive of the Debt Management Office.
But Mr Stheeman yesterday raised the prospect of this happening in coming months due to the huge volumes of government paper which are set to flood the market--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0
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