Deflation or inflation? Vote now

ad9898_3

inflation

My view is, as soon as mortgage rates start to rise (and because of Merv's speech this week and the gilt failure, I have read that the fixed rate mortgage market could be heading up as early as next week), inflation will be let off the leash and IR's will have to rise very sharply to counter this.

This is why I see economic recovery in Britain as a long way off, inflation (RPI) is being kept artificially low due to the base rate at this time, once the base rate starts to rise so will inflation in a kind of vicious circle, and thats to say nothing of Brown's mega tax bombshell that awaits just around the corner for every worker and their children in the country when we see a glimmer of a recovery.

chucky

ad9898 wrote: »

My view is, as soon as mortgage rates start to rise (and because of Merv's speech this week and the gilt failure, I have read that the fixed rate mortgage market could be heading up as early as next week), inflation will be let off the leash and IR's will have to rise very sharply to counter this.

i think the same about fixed rates i said this on DD's thread - Libor rates are creeping up so don't expect Fixed Rates over 2 years to stay at that level especially with the Government owned banks. they're the ones with the high revenue targets to repay.

as for the gilt failure - not the worst thing in the world.
the index linked one straight after that one was 3 times oversubscribed.

carolt

inflation

ad9898 wrote: »

My view is, as soon as mortgage rates start to rise (and because of Merv's speech this week and the gilt failure, I have read that the fixed rate mortgage market could be heading up as early as next week), inflation will be let off the leash and IR's will have to rise very sharply to counter this.

This is why I see economic recovery in Britain as a long way off, inflation (RPI) is being kept artificially low due to the base rate at this time, once the base rate starts to rise so will inflation in a kind of vicious circle, and thats to say nothing of Brown's mega tax bombshell that awaits just around the corner for every worker and their children in the country when we see a glimmer of a recovery.

Ah well, every cloud etc - if interest rates rise, house prices will have to fall even further to meet them......

tomterm8

An interesting point is that the fall of the RPI index appears to be a result of prior high numbers falling off, the monthly figure on RPI was actually positive, suggesting that sustained inflation is very unlikely in the near term.

Not a surprise as such, given the competative devaluation, but the conclusion I'm reaching is that inflation is likely to have reached more or less its nadir in britain.

The other conclusion I'm reaching is that it is quite possible the UK economy will post positive growth in q4 this year.

pickles110564

deflation

carolt wrote: »

Ah well, every cloud etc - if interest rates rise, house prices will have to fall even further to meet them......

And rental income will rise as well, for once we agree.

bluey890

pickles110564 wrote: »

And rental income will rise as well, for once we agree.

sooner or later btl is going to be seen as easy pickings for tax

mewbie_2

inflation

bluey890 wrote: »

sooner or later btl is going to be seen as easy pickings for tax

You probably need to be making a profit first.

bluey890

mewbie wrote: »

You probably need to be making a profit first.

many lls are. those that built portfolios earlier. btl tax efficient.
offsetting debt interest against income before tax is part of what led to debt boom, btl boom & private equity boom.

pickles110564

deflation

mewbie wrote: »

You probably need to be making a profit first.

Mewbie even you must have a better memory of the letter proving what mortgage rates that I am being charged. But yes I am making a tidy profit at the moment which will mean I can bring forward the end of the CBS Mortgages.:j

mewbie_2

inflation

bluey890 wrote: »

many lls are. those that built portfolios earlier. btl tax efficient.
offsetting debt interest against income before tax is part of what led to debt boom, btl boom & private equity boom.

Pity about the sad little losers out there still trying to big themselves up.