Average earnings growth goes negative.

CLAPTON

saguk1234 wrote: »

Wages down, house prices up. Makes sense!

aggregate income up, unemployment down, people make their own decisions about how to spend their own money


makes sense


standard of maths education is this country is a disgrace.

MFW_ASAP

Graham_Devon wrote: »

Well, at least it's given the green light for the BOE today to suggest there will be no interest rate rise this year as the focus for interest rate increases now switches miracolously to wage growth and moves away from the focus over the last couple of months of spare capacity.

http://www.telegraph.co.uk/finance/bank-of-england/11030408/Bank-of-England-no-early-interest-rate-rise-as-wages-forecast-slashed.html

Good news for those brave souls who gambled on interest rates being low for years and bought a dream house on the strength of it. By the time rates go up, these guys will have paid down their mortgages and will have 'made hay while the sun shone'.


Fantastic.

CLAPTON

Many of us dismissed earlier pronouncements from the then much admired 'superman' Carney, about triggers for interest rate rises and preferred the standard economic text book answers.


that is that interest rates will go up when increasing wage pressures impact on the general level of inflation.


I see no reason to change from that at the moment.


trust me, I'm not an economist and don't work for the BoE and don't have to make grave and incomprehensible public statements at expensive dinners

Cyberman60

CLAPTON wrote: »

Many of us dismissed earlier pronouncements from the then much admired 'superman' Carney, about triggers for interest rate rises and preferred the standard economic text book answers.


that is that interest rates will go up when increasing wage pressures impact on the general level of inflation.


I see no reason to change from that at the moment.


trust me, I'm not an economist and don't work for the BoE and don't have to make grave and incomprehensible public statements at expensive dinners

Nobody will admit it but HMG simply cannot afford a rise in interest rates. Debt is cheap at the moment and HMG are borrowing 300 million a day + interest to finance the annual deficit + National Debt.
Interest payments on National Debt is nearly 60 Billion a year. To keep their payments on debt low HMG are deliberately keeping interest rates low !!!!!!!!

MFW_ASAP

DEVIL_ADVOCATE wrote: »

Yeah, but to be fair, loads of other people (AKA Bears) on here saw the credit crunch coming and predicted low rates for years. You're not so special.

True, lots of Bears made predictions but none of them seemed to have faith enough in their own beliefs to back them up with hard cash. I have and now I am reaping the benefits.


I did the same at the start of the CCrunch when all the talk on here from the bears was a recession and stock market crash. I agreed with them and cashed in my shares and funds, leaving my pension in cash. As soon as the crash occurred and the FTSE100 dropped to around 3400 I put my money back in. The recovery, coupled with gains from QE, I have added about £50k to my pension pot without making a single contribution to it.


It's all very well for the Bears to make these dire predictions, but they never seem to actually do anything about them. Crazy.

CLAPTON

Cyberman60 wrote: »

Nobody will admit it but HMG simply cannot afford a rise in interest rates. Debt is cheap at the moment and HMG are borrowing 300 million a day + interest to finance the annual deficit + National Debt.
Interest payments on National Debt is nearly 60 Billion a year. To keep their payments on debt low HMG are deliberately keeping interest rates low !!!!!!!!

so your prediction is low interest rates for the next 100 years (the minimum time to clear the national debt)


whilst mine is that rates will rise if wage inflation starts to cause general inflation: I don't rule out rises due to other events however, but at the moment (next 6 months) I don't see that happening.


only time will tell which is the better prediction

Thrugelmir

saguk1234 wrote: »

Wages down, house prices up. Makes sense!

Housing transaction volume still low.......

Particularly if you exclude new build mortgages going to FTB's.

Thrugelmir

michaels wrote: »

Also with the number in employment rising rapidly total pay in the economy will also be rising enough to support the increase in consumption needed to give decent gdp growth and rising house prices.

Majority of new jobs are low skill therefore low pay.

Productivity (output) is still showing no signs of increasing.

michaels

Thrugelmir wrote: »

Majority of new jobs are low skill therefore low pay.

Productivity (output) is still showing no signs of increasing.

True but as I said with total employment up strongly, is it nearly 3% in the last 12 months, total renumeration must be up 3.5% so 3.5% more money is available to buy goods, services and housing.

Graham_Devon

michaels wrote: »

True but as I said with total employment up strongly, is it nearly 3% in the last 12 months, total renumeration must be up 3.5% so 3.5% more money is available to buy goods, services and housing.

Not neccesarily.

These people won't have had no money (assuming they were out of school and unemployed). They will have received some form of benefits.

Getting a job doesn't always mean your income rises as much as the job pays. It just means your income comes from somewhere else.