standard of living to plunge at fastest rate since 1920s BOE Merv says

julieq

Why would there be any effect at all on house prices due to repayments you've just agreed we can cope with?

You don't need a massive influx of market entrants to raise prices incidentally. That is also one of the great bear myths. All you need is an imbalance between supply and demand such that rental yield stays at a particular level relative to value. In that case, ownership stays with landlords.

Housebear51

It was very refreshing for Merv to tell the truth for once. But I do not think this is a trend next thing they will prob try and talk up the market. I also do not think his counterparts like Helicopter Ben will start telling the truth.

I will keep my sig below as it is.

PS this will have a negative effect on house price when people fixed term payments come to an end. Monthly payments will be going up as will cost of living. Many more distressed sellers and not many can raise enough money to buy until house prices come down a lot more.

Spartacus_Mills

Loughton_Monkey wrote: »

As honest and frank as Merv may be, what can he do about cuddly Bob Crow (for example) and all the other union bosses who will now be holding the country to ransom? Time for more stringent strike laws?

No.

I would say the strike laws we have are fine as they are. Just because we may not like the result of a ballot for strike action within a Trades Union does not mean the law should be changed.

I am no fan of Bob Crow's politics. He is, quite frankly, bonkers, but he does stick up for his members and he does his job well. He is accountable to his members not to the general public and does what he believes is in their best interest.

Generali

IronWolf wrote: »

Wasn't the 1920s a brilliant decade of prosperous economic growth??

Surely he means early 1930s.

Not in the UK. The UK had high interest rates in the period 1920-25 in order to enable the Bank of England to finance the Government deficit in the first instance under an inflationary background and then later in order to create deflation deliberately to push up the value of the Pound against the US Dollar.

Deflation meant prices fell by about 25% in the UK over the period.

The UK went back onto the Gold Standard in 1925 (meaning a Pound note could be swapped for a fixed amount of Gold) at quite a high rate which depressed economic activity further through the 1920s, GDP rose but at quite a slow rate.

The US had a big boom in the 1920s.

tomterm8

Yeah, we had our great depression a decade earlier than the US, and although there was a recession in the 1930's, it simply wasn't that large a deal than in the UK.

But it is scary he is claiming it will be worse than the early 1960's... the thing that was really 'great' about the great depression wasn't so much how deep it was, because that wasn't unprecedented, but the fact that like Japan in the 90's, it took decades to return to anything like the same living standards.

There are already more American citizens on food stamps than American citizens who relied on soup kitchens during the great depression...

In some ways, the effects of the great depression hasn't even ended up to the current point in time, because the loss in potential growth was never really recovered, we just became used to the new normal.

DervProf

crazygaijin wrote: »

Here is Merv King speaking the truth. Usually people like him talk up green shoots.

I applaud him he sets a good example for his counterparts in other countries.

He wants to prepare the people for hard times to come.


Jim Rickards talks about what Merv said here, he agrees with the Bank of England governer.

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/1/27_Jim_Rickards_files/Jim%20Rickards%201:27:2011.mp3

Merv didn't tell the truth when he said (around this time last year) that the rise in inflation was just a blip, and would head downwards over the coming months.

MrPThomas

DervProf wrote: »

Merv didn't tell the truth when he said (around this time last year) that the rise in inflation was just a blip, and would head downwards over the coming months.

99% of what he says is talking up the market.

Why the change now? I wonder if this is him being positive the truth is much worse.

Housebear51

MrPThomas wrote: »

99% of what he says is talking up the market.

Why the change now? I wonder if this is him being positive the truth is much worse.

Wow if this is Merv talking up the market I would hate to see him being honest!

geneer

Economy totally knackered?!
Thanks again bulls!

MrEnglish

Housebear51 wrote: »

Wow if this is Merv talking up the market I would hate to see him being honest!

Well even though he was a little more honest, he still isnt giving it as bad as it is. So he could be still talking up the market.