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Debate House Prices
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Future interest rates: what the "experts" are saying
Comments
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so broadly speaking, most experts agree that rate rises are coming with a steepening curve. It makes a fresh change to see info that does not contradict itself.0
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HtHoldings wrote: »That think tank Policy exchange said IRs will be back up to 8% in 2 years. As the impact of the huge expansion of the money supply fed through into prices.
No they didn't.
What they said was there is a chance rates would be that high IF we have an almighty boom/recovery.That may or may not prove true but one thing seems certain : a return to a more more normal rate of around 5% is guaranteed at some point in the next 2 or 3 years.
Not according to the BoE, who believe the new "normal" for interest rates is around 3%..... ie, above this level demand destruction equivalent to rates of 6% last decade ocurrs.
In order for rates to rise to 5% in the next 2-3 years, you'd have to see a boom of legendary proportions, as bank lending returns with a vengeance growing the money supply, pay rises take off in a big way, and a huge wave of liquidity creates the circumstances neccessary for a surplus of money to be chasing a shortage of goods.
Do you really think that is likely?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
so broadly speaking, most experts agree that rate rises are coming with a steepening curve. It makes a fresh change to see info that does not contradict itself.
Actually, "broadly speaking", the experts who have been right about rates so far say nothing of the kind.vivatifosi wrote: »Benjamin Williamson, CEBR:
2010 0.5% 2011 0.5% 2015 1.5-2.0%
Roger Bootle, Capital Economics:
2010 0.5% 2011 0.5% 2015 0.5-1.0%*
* at end of parliament.
The article goes on to say that over the recent period, CEBR and Capital Economics have been the most accurate predictors of rate rises, though in the case of the latter this accuracy has not extended to its work on house prices.
(Sunday Times, Money section, 29.08.10, pages 4-5)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Actually, "broadly speaking", the experts who have been right about rates so far say nothing of the kind.
even a possible 2% is quite a leap from todays rates and will make a lot of difference to a lot of people..0 -
Looking good for mortgage holders especially those with BR linked mortgages.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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Generali (strictly an amateur, not an expert)
2010 0.5% 2011 0.5% 2015 5%
I'm going to have to side with Generali, not only because IMHO hes one of the best posters on here, but because his predictions fit nicely with my mortgage challenge.
It's good to see so many axperts at leats agree over the next couple of years, I basically need low rates for three, preferably four years for my gamble to pay off. Mind you, if I keep paying out on these renovations I might have to hope for low rates over 5 or 6 years!
(I'm £5k down on my plumbing already and all I have to show for it so far is a hole in the floor that I dug in preparation for the pipework!) :eek:0 -
even a possible 2% is quite a leap from todays rates and will make a lot of difference to a lot of people..
Seriously? Over 5 years?
:rotfl:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Are you quoting Capital Economics? Aren't they the ones you rubbish for their wacky house price predictions?HAMISH_MCTAVISH wrote: »Actually, "broadly speaking", the experts who have been right about rates so far say nothing of the kind.0 -
Are you quoting Capital Economics? Aren't they the ones you rubbish for their wacky house price predictions?
"The article goes on to say that over the recent period, CEBR and Capital Economics have been the most accurate predictors of rate rises, though in the case of the latter this accuracy has not extended to its work on house prices "“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Yes Hamish. I hear you. So Capital Economics are now a revered forecaster with the exception of their house price forecasts of course. I wonder if they base their interest rate prediction on anything - like expected state of the housing market perhaps, or the economy? Perhaps the same forecaster does both. Or maybe the house price forecast is just rolling some dice wheras the interest rates involves tea leaves.HAMISH_MCTAVISH wrote: »"The article goes on to say that over the recent period, CEBR and Capital Economics have been the most accurate predictors of rate rises, though in the case of the latter this accuracy has not extended to its work on house prices "0
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