CEBR: Rates to stay at 0.5% til 2012

HAMISH_MCTAVISH

Following the emergency budget today, the centre for economics and business research predicts that interest rates will remain stable at 0.5% until the end of 2012. Douglas McWIlliams, chief executive of cebr, says: “The chancellor noted Mervyn King’s remark at the Mansion House dinner last week that if growth was slower interest rates would be lower. “We agree and – with our lower growth forecast we now think that base rates will be stable at 0.5% until the end of 2012 and the 10 year bond yield will fall to 3%. With base rates lower for longer, we also expect mortgage rates to fall from around 4% at present to 3% by early next year.”

http://www.mortgagestrategy.co.uk/economy/cebr-says-base-rate-stable-at-05-until-2012/1013866.article

Stunning result for the housing market.:beer:

Really2

But rates were meant to be in double digits after the election.:mad:

HAMISH_MCTAVISH

LOL......

I think they've finally run out of excuses.

Blacklight

HAMISH_MCTAVISH wrote: »

LOL......

I think they've finally run out of excuses.

Unemployment will be the root cause of 40-50% falls by the end of the year. You'll see.

abaxas

Business thinktank wants low rates.

Who would have thought it!

davilown

Blacklight wrote: »

Unemployment will be the root cause of 40-50% falls by the end of the year. You'll see.

I'll be the first to admit that I thought the market would crash by 40% by the end of 2010 but I have had to rethink this as I don't believe its possible, or even next year.

I do think that this will further stabilise house prices, with a -5% or 0% growth is also likely in my opinion by the new year - limited to the London/South East areas. Other areas - different story I fear. Don't know why or how, but I feel house prices are going to be a growing concern for most areas by this time next year.

The only concern I have is the ability of people to pay back when the rates go up - let be honest, they are going to go back up but its just a matter of when.

Personally, I want rates to go up but that's only because I'm now saving.

the_flying_pig

'Fing is, Hamish, if they'd said something like 'we predict low rates because of, despite high growth, low inflationary pressures' I'd have agreed with you.

But this article is predicated on "slower growth".

You have to look at both sides of the equation, the economy genrerally and rates. Of the two statements: 'we're going to have rapid growth' and 'we're going to have slow to non-existent growth & interest rates will be kept low because of this' the former is clearly much more compatible with runaway house price inflation.

Interest rates were at pretty much exactly the same level in 2002 [HPI 20-25%] as in 2008 [HPI minus 15-20%]... it's just that the economic conditions were, you know, a little different.

I don't think we're due another year that feels even vaguely like a boom, certainly not a housing boom given how recent the last one was and how stretched affordability is, for a very long time indeed.

FATBALLZ

HAMISH_MCTAVISH wrote: »

Stunning result for the housing market.:beer:

Doesn't the term 'result' refer to something that has already happened? Not speculative guesswork of future events?

nembot

Let me highlight a word you often miss off your topic's Hamish.

The centre for economics and business research predicts

Which means, they don't know and neither do you.

:beer:

lvader

I did say cuts would stop the need for interest rate hikes.

System

nembot wrote: »

Let me highlight a word you often miss off your topic's Hamish.



Which means, they don't know and neither do you.

:beer:

Every single bearish thread since Feb 2009 has been a prediction, were you making this comment? No, because you're a hypocrite with a BTL.

If you want to be taken seriously, stop going out of your way to be an utter, utter imbecile. And I give you the benefit of the doubt there by assuming you're doing it on purpose.

One other thing, an apostrophe does not mean "look out! here comes an S"