BoE "comfortable with slowly deflating housing sector"

ReadingTim

There's a pretty sensible article on the Guardian's website at the moment ("House prices rose marginally in October, but market is slowing") that I can't link to, but hope you can find, the most reasonable quote being:

"It is evident that the Bank of England is comfortable with a slowly deflating housing sector which, over time, might restore affordability and ease access to the market," (my italics)

I would suggest on the basis of this, the best you'll get is a 'house price crumble', rather than any kind of crash...

Blacklight

I expect it refers to house prices falling slowly in real terms, which is the probable outcome. History also testifies to this.

Wages will catch up, prices will not fall.

Loughton_Monkey

Here's the link to which you refer

http://www.guardian.co.uk/money/2010/nov/12/house-prices-rose-marginally-october

Just what we need. Yet another bunch of academics talking about house prices. Thank God they didn't mention Aberdeen!

treliac

Blacklight wrote: »

I expect it refers to house prices falling slowly in real terms, which is the probable outcome. History also testifies to this.

Wages will catch up, prices will not fall.

I think it will be a (gradual) combination of both.

Batchy

Blacklight wrote: »

I expect it refers to house prices falling slowly in real terms, which is the probable outcome. History also testifies to this.

Wages will catch up, prices will not fall.

Wages WILL catch up? are you sure!

I think many public sector workers would beg to differ.

Some people are fortunate, but at least I know im fortunate!

Some people are fortunate, that they have gold plated pensions! But do they know that, when they perform strikes, after strikes, etc.

If I wanted to do something about it, I would, but im happy enough to plod along. knowing when times are bad, for the company its going to be bad for me, when times are good, they will almost certainly look after me, or lose me. simples!

Blacklight

Batchy wrote: »

Wages WILL catch up? are you sure!

I think many public sector workers would beg to differ.

Some people are fortunate, but at least I know im fortunate!

Some people are fortunate, that they have gold plated pensions! But do they know that, when they perform strikes, after strikes, etc.

If I wanted to do something about it, I would, but im happy enough to plod along. knowing when times are bad, for the company its going to be bad for me, when times are good, they will almost certainly look after me, or lose me. simples!

The knee jerk reaction is say that the entire public sector will either be taking cuts or at least freezes. This simply isn't true.

Going back two years there was a hell of a lot of private companies putting workers on four day weeks or freezing pay for two years. This has stopped now and we will see wage inflation for private workers.

Some council workers pay will be frozen but you'll still see nurses, firefighters, police, soldiers all getting pay increases. Two years on it'll all be back to normal like it is for private sector workers.

Turnbull2000

My prediction on HPC back in 2008 was that there's no chance of more large nominal falls after the 20% shock, and provided a number of legitimate reasons. Furthermore, I insisted that the BoE will not dare raise interest rates back to pre-crunch levels, as the housing market will be a foremost consideration, thus rates will likely remain ultra-low for at least the next five years. Meanwhile, transactions will remain low in the years ahead, with new entrants restricted to cash rich parents and landlords. We're essentially on the path to a two-tier society of the property rich and tenants, with the latter unfortunate group growing hugely.

Didn't go down well!

Graham_Devon

Blacklight wrote: »

Wages will catch up, prices will not fall.

I've asked this twice now, and this will be the third time I have asked you after you have stated this...

How? What is going to not only soak up all the public sector culls, but also provide wage growth?

You just keep saying it will happen. But never how, even when asked.

Blacklight

You've succumbed to the media spin Graham.

"6000 jobs are under threat at Lancashire County Council as they are forced to reduce their budget by 27%"

Translation: Some positions might not be filled again once they are lost through natural wastage in Lancashire Councils 6000 strong workforce as their budget, massively over inflated under 13 years of Labour rule to ensure public sector votes, is cut by 8%, 5%, 0.7% and 4% over the next four years respectively.

Hardly culling.

Furthermore, you can't just refuse to pay people.

Graham_Devon

Blacklight wrote: »

You've succumbed to the media spin Graham.

"6000 jobs are under threat at Lancashire County Council as they are forced to reduce their budget by 27%"

Translation: Some positions might not be filled again once they are lost through natural wastage in Lancashire Councils 6000 strong workforce as their budget, massively over inflated under 13 years of Labour rule to ensure public sector votes, is cut by 8%, 5%, 0.7% and 4% over the next four years respectively.

Hardly culling.

Furthermore, you can't just refuse to pay people.

That got absolutely nothing to do with my post really. Jobs are still lost, even through natural wastage.

The natural wastage argument is compltely flawed...we have new workers looking for jobs all the time...hence unemployment goes up, as new worker can no longer fill the position thats gone through natural wastage. (No secumbming to media spin here, sorry).

My question was more where wage inflation will come from. This is now the fourth time I have asked you, you always state it will happen as fact. But never seem to keen to answer how.

Blacklight

Graham_Devon wrote: »

That got absolutely nothing to do with my post really. Jobs are still lost, even through natural wastage.

The natural wastage argument is compltely flawed...we have new workers looking for jobs all the time...hence unemployment goes up, as new worker can no longer fill the position thats gone through natural wastage. (No secumbming to media spin here, sorry).

My question was more where wage inflation will come from. This is now the fourth time I have asked you, you always state it will happen as fact. But never seem to keen to answer how.

Alright Graham, you win, there won't be any pay rises ever again. Ever.