Now this is a Property Bears nightmare

homelessskilledworker

And a disgrace...

It seems that saving is no longer the prudent, sensible and wise thing to do anymore.


http://www.telegraph.co.uk/finance/financetopics/davos/9829310/Carney-to-put-growth-top-of-list.html



If this Government attempts to inflate our problems away then this will be the beggining of the end for the UK.

HAMISH_MCTAVISH

From the article.

Carney to put growth top of list

The new Governor of the Bank of England has signalled that he will put growth at the heart of his approach to the job and is willing to see higher inflation for longer in order to support the economy.

Using the US as an example, Mr Carney said economies needed to be allowed to reach an “escape velocity” in which they were out of danger of slipping back into recession.

That would suggest keeping interest rates lower for longer while considering further quantitative easing, indirect provision of monetary stimulus via the financial system.

He added that monetary levers had not been “maxed out or taken to the hilt”.

“There continue to be monetary policy options in all the major economies,” he said

To be expected, and really just a continuation of current policy.

Although hopefully he'll be a bit less conservative than King, and increase liquidity support through more direct means.

Wookster

According to a report on Newsnight, residents of Sheffield (and presumably most of the rest of the country) have lost 19% of disposable income over the last 5 years.

If you're looking for a reason for sluggish growth, that will be it.

homelessskilledworker

HAMISH_MCTAVISH wrote: »

From the article.



To be expected, and really just a continuation of current policy.

Although hopefully he'll be a bit less conservative than King, and increase liquidity support through more direct means.

You really are a one song juke box Hamish, rather than always trying to score points why don't you try reading and digest.

I am more concerned about the Inflation side, thats the reason I posted. And how is that a "continuation of current policy", Inflation control has been one of the biggest success stories of the last decade.

armour

It is a decision of the Government,” he said of any change in the Bank’s remit.

I don't know why you're always jumping down Hamish's throat HSW. I could see this coming a mile off.
When was the last time the bank hit it's 2% target?
By some measures, HMG has debts & liabilities of 900% of GDP, don't you think it makes sense (to the government) to inflate the debt away?
I believe there is gonna be highish inflation for the next decade or so whoever wins the next election.
Nobody should be holding cash.

moneyinmypocket

I have always said the gov will do anything to stop a hpc hence we will never see one

gorgeyetsun

This is great news for home owners. Most people's largest monthly outgoings are their morgage payments. With rates fixed at low levels and mortgage debt safe from inflation, it's the perfect circumstances to keep outgoings down.

While it is painful to have food and fuel costs going up, just a 1% rise in interest rates would cost home owners with a £100k mortgage an extra £1000 per year. A far larger increase than they'd see on food, etc.

Pity for renters as their rents will probably increase with inflation, but great for BTL landlords. All I can suggest is that if people are holding off buying thinking that a housing crash is on the way - think again. It's time to buy and lock in those savings.

Thrugelmir

moneyinmypocket wrote: »

I have always said the gov will do anything to stop a hpc hence we will never see one

Is that why house prices are falling once inflation is taken into account?

More than one way to skin a cat.

gorgeyetsun

Thrugelmir wrote: »

Is that why house prices are falling once inflation is taken into account?

More than one way to skin a cat.

But not if income and savings are falling faster, 19% fall in disposible income according to Wookster's post. Unless people are investing their money in inflation beating savings (NSANDI anyone?) then house prices are falling at a lower rate than incomes and savings, which means house prices are notionally rising (as well as rising in real terms in some parts of the uk).

Thrugelmir

gorgeyetsun wrote: »

But not if income and savings are falling faster, 19% fall in disposible income according to Wookster's post. Unless people are investing their money in inflation beating savings (NSANDI anyone?) then house prices are falling at a lower rate than incomes and savings, which means house prices are notionally rising (as well as rising in real terms in some parts of the uk).

Savings rate is increasing. Which is one reason growth is sluggish. As a high proporion of UK GDP is consumer orientated.

Interest is a cost. Whatever the rate is. So much depends on how leveraged the borrower is. As to whether property is still a good investment or not. Many were caught at the top of the market. So now finding that capital to be repaid is a ball and chain. As disposable income is being squeezed.

gorgeyetsun

Thrugelmir wrote: »

Savings rate is increasing. Which is one reason growth is sluggish. As a high proporion of UK GDP is consumer orientated.

Interest is a cost. Whatever the rate is. So much depends on how leveraged the borrower is. As to whether property is still a good investment or not. Many were caught at the top of the market. So now finding that capital to be repaid is a ball and chain. As disposable income is being squeezed.

The rate people at which people are saving may have increased, but the return on those savings is not. The value of the savings is therefore eroding against inflation.

The vast majority of properties were not bought at the top of the market. Even the minority of people who bought at the top are enjoying having their housing costs free from inflation - which is most people's largest monthly outgoing.