Are we expecting BOE to remain at 4.75% on 8th February 2025?

ReadySteadyPop

jobbywobbler said:

Maka344 said:

jobbywobbler said:

lojo1000 said:

Yields continue to rise as markets realise the only way to keep the economy afloat in the near term (inside 5 years) is not only more monetary expansion but also getting this money into the hands of the working classes (since they spend it, not speculate with it) whilst also knowing this ultimately leads to hyper-inflation.

No central banker/politician has the stomach to admit (other than Milei who stated this prior to being elected) that increasing debt to stimulate an economy actually kills that economy.

Loosening your belt whilst eating more is not a long term solution to being overweight.

If you have a mortgage, I would pay it off as fast as possible (not financial advice!)

Totally agree on the mortgage front, can this getting very sticky indeed

May I ask what this means for a layman. Thanks

Stagflation - economy is sticky/retracts and inflation kicks in/up again - means no where to run.  

Interest rates remain higher than the Bank wants (not me) but also no growth/companies can't spend (or borrow) and the man on the street has less in his pocket (these pay increases are around the national living wage) many middle earners are sitting on frozen pay before anyone shouts).    

Reeves has thrown petrol on a pre-lit fire.

If wide spread jobs are cut next year due to NI increases (I know a few IT firms planning this now) then sticky becomes sludgy. 

Yep, this could be where we are heading, the more debt you are carrying the more difficult it will be to pay for that debt.

ReadySteadyPop

MobileSaver said:

lojo1000 said:

ReadySteadyPop said:

The best way to keep the economy afloat is cheaper housing, much cheaper, that way people have more money to spend into the real job creating economy.

That's a nice wish.

It's not even that though really. A wish is generally regarded as something that could happen albeit highly unlikely; much cheaper housing is just pure fantasy - it's never going to happen in @ReadySteadyPop's lifetime.

Same as interest rates going back up as many people warned about?

ReadySteadyPop

Hoenir said:

Meanwhile mortgage rates will continue to harden. As normality finally returns. Days of cheap borrowing are over. QT is slowing draining liquidity out of the financial system. Through to 2027. Many mortgage holders yet to refinance onto new deals. 

Yep, so many don`t want to accept or understand this though?

lojo1000

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

MeteredOut

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

Burgers?   

Hoenir

jobbywobbler said:

Meant to add - NI increases in April will mean retailers bump their prices, leading to more inflation.    Happy Christmas

You've also overlooked all the other costs in the supply, distribution and retail chains that are increasing. Not least the minimum wage. Which was generously boosted by the Chancellor above the expected rate of increase.   

MobileSaver

ReadySteadyPop said:

MobileSaver said:

lojo1000 said:

ReadySteadyPop said:

The best way to keep the economy afloat is cheaper housing, much cheaper, that way people have more money to spend into the real job creating economy.

That's a nice wish.

It's not even that though really. A wish is generally regarded as something that could happen albeit highly unlikely; much cheaper housing is just pure fantasy - it's never going to happen in @ReadySteadyPop's lifetime.

Same as interest rates going back up as many people warned about?

Er, no? Interest rates going back up was inevitable which is pretty much the exact opposite of pure fantasy.

jobbywobbler

Hoenir said:

jobbywobbler said:

Meant to add - NI increases in April will mean retailers bump their prices, leading to more inflation.    Happy Christmas

You've also overlooked all the other costs in the supply, distribution and retail chains that are increasing. Not least the minimum wage. Which was generously boosted by the Chancellor above the expected rate of increase.   

Oh totally 100 agree%.   Short sighting a bit me thinks by RR & Co

ReadySteadyPop

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

In the 80`s property crash people were offloading property to pay other debts, I could see a lot of BTL/AirBnB at deep discounts if the trade war kicks off next year as expected.

MeteredOut

ReadySteadyPop said:

lojo1000 said:

The issue for those with property portfolios is the illiquidity (unlike some other assets!).

By the time the fall in price convinces ppl they need to sell before negative equity kicks in, they cannot line up a buyer at the price they had in their head.

Recency bias on the way down is where property owners suffer. Whereas on the way up they suffer from locality bias. As in, "the house down the street sold for 300k so this one must be 310k!".

I think inflation continues to climb near term but as soon as the doom and gloom comes back to main street, CBs will cut, cut, cut and likely need even more QE and then we're really off to the races - hyperinflation and asset prices through the roof. Unemployment is the only issue there. What are you forced to sell when unemployed?

In the 80`s property crash people were offloading property to pay other debts, I could am really really really really hoping see a lot of BTL/AirBnB at deep discounts if the trade war kicks off next year as expected.

Fixed that for you.