Mark Carney warns of complacency in financial markets

Electrum

Generali wrote: »

Why do you think that please? Surely the MPC (not Mr Carney) will increase rates only when the economy can cope with higher rates. House prices only fall when there are forced sales, history tells us that.

Exactly, house prices fall when there are forced sales. Many house owners have got used to these low interest rates and forget that its an emergency measure and can not last. When interest rates correct, then property prices will correct.

You say "Interest rates can only increase when the economy can cope with it!" Are things really still that bad? They still cant cope with it after all these years? We still have an emergency going on? I thought the perma prop bulls have been screaming recovery and green shoots for many years now?

Thrugelmir

AG47 wrote: »

He has a hard job, if he doesn't raise rates then we are still in an emergency 300 yr low record!

If he does house prices will have a large correction with record number of defaults.


Either way he can't try to claim recovery on his watch.

Rules can be placed on the lenders to restrict available credit for mortgages. Interest rates aren't the only mechanism.

CLAPTON

Electrum wrote: »

Exactly, house prices fall when there are forced sales. Many house owners have got used to these low interest rates and forget that its an emergency measure and can not last. When interest rates correct, then property prices will correct.

You say "Interest rates can only increase when the economy can cope with it!" Are things really still that bad? They still cant cope with it after all these years? We still have an emergency going on? I thought the perma prop bulls have been screaming recovery and green shoots for many years now?

there will be a small number of people with high mortgages where increases in interest rates will be a problem
but these will be small numbers and won't of itself cause much of a reduction in price
new buyers may well be discouraged from bidding to highly which may moderate the increase in price.
with immigration running at 600,000 a year, 'popular ' places are assured on increasing demand