Whoops - BOE downgrades forecast and backs up labours concerns

HAMISH_MCTAVISH

wymondham wrote: »

I presume we'll now get all the bad news that was 'avoided' before the election?

Meh...

I'm still eagerly awaiting news of the top-secret massive new oil fields the Yes campaign promised us were being hidden until after the Scottish referendum.

Rather suspect we'll both be disappointed.;)

Aberdeenangarse

I should imagine that Graham's idea of a good day out is going to a Funeral.

chucknorris

wotsthat wrote: »

Wouldn't this be priced in to share prices?

It's something I think about quite a lot because I've invested heavily in high yield stocks over the last 6 years and can't work out if an income seeker would sell shares just to get an extra 1% (say) on cash savings.

If they do then the same argument might apply to BTL too as people sell up to get an increased yield on cash.

High yield shares have been so reliable I've not looked elsewhere - might need to alter the mindset as interest rate rises come through.

Personally I wouldn't, probably for the same reasons that you wouldn't, i.e. better tax treatment of dividend income (for higher rate tax payers) and the possibility of capital growth. But of course as you suggest, what will the crowd do?

wotsthat

chucknorris wrote: »

Personally I wouldn't, probably for the same reasons that you wouldn't, i.e. better tax treatment of dividend income (for higher rate tax payers) and the possibility of capital growth. But of course as you suggest, what will the crowd do?

I almost certainly won't sell current holdings and will likely continue to chase dividends even if rates rise. However, I'm realising this would be down to habit rather than considering the effect of BoE rate rises on the economy.

I don't much care if people sell into rising rates either - cheaper shares for me. I discount the capital as soon as it's invested anyway and try to concentrate only on income. My thinking is that once dividend income = x then I'll retire. It's ingrained to the extent that if I spend £100 on something I consider the cost to be £100 plus c£4 per year loss of income every year for the rest of my life.

I realise not everyone thinks this way so I'm interested in what the practical effects might be on people's behaviour when rates rise. Other than some initial excitement at the wonder of BoE rates changing and a street party in Devon I wonder if the effects will be that profound especially given rates will have likely have risen because of positive changes in the economy.

cells

kabayiri wrote: »

My question would be ....where are these new jobs going?

The global demand for skilled jobs; particularly new technology; has not really shown signs of diminishing.

Consumer demand for modern technology product is still strong. Additionally, there is a lot of research in medical technology expected to break through into new products, with demand from places like Africa and Asia driving change through.

Are we producing the right sort of graduates? Over a decade ago Gordon Brown recognised the need to create a knowledge-based economy. Did this translate into further education?

The knowledge economy is quite misleading. We are and will continue to be a knowledge economy in that patents and copyright and trademarks will become more and more valuable but that doesn't mean the masses will be involved in it.

in much the same way we are a manufacturing powerhouse but few people are employed in it

The majority of the future jobs in the UK will be simple service jobs (just as they are now). Retail chain, admin, banking and insurance, legal and professional services etc

wymondham

danothy wrote: »

This says more about your son than the overall state of higher education really.

Ah, so he frequents with light weights! (he's not doing any of these courses by the way!)

MFW_ASAP

chucknorris wrote: »

I seem to remember that when the base rate was first cut to 0.5%, some doomsters were saying that the economy was doomed, and like Japan, would be for decades, and that interest rates would stay low for that long (with deflation etc. etc.). Although still very unlikely, that 10 year anniversary is beginning to appear on the radar.

I seem to remember that someone on here thought interest rates would stay low for a long time and put his money where his mouth was and bought a dream home in 2010 with a 5 x salary mortgage. It was an interest rate gamble that continues to pay off to this very day. By the time interest rates start to move up, he'll have the same mortgage on a 6 bed farmhouse and some people have on a 3 bed semi.

This guy is an ordinary working class bloke made good and is adored by the other 'salt of the earth' members of the board, such as Graham Devon and shortchanged. He's a modern day hero!!

chucknorris

MFW_ASAP wrote: »

I seem to remember that someone on here thought interest rates would stay low for a long time and put his money where his mouth was and bought a dream home in 2010 with a 5 x salary mortgage. It was an interest rate gamble that continues to pay off to this very day. By the time interest rates start to move up, he'll have the same mortgage on a 6 bed farmhouse and some people have on a 3 bed semi.

This guy is an ordinary working class bloke made good and is adored by the other 'salt of the earth' members of the board, such as Graham Devon and shortchanged. He's a modern day hero!!

Yes I think (obviously know) who you are talking about, Graham and shortchanged were big fans weren't they, almost as much as geneer was. I'm probably in the same position as you, i.e. not in any hurry for rates to rise.

Thrugelmir

wotsthat wrote: »

I almost certainly won't sell current holdings and will likely continue to chase dividends even if rates rise. However, I'm realising this would be down to habit rather than considering the effect of BoE rate rises on the economy.

What if the number of quality high yielders continues to diminish?

wotsthat

Thrugelmir wrote: »

What if the number of quality high yielders continues to diminish?

Well if there aren't any good quality high yielders to buy then I can't buy them!