Interest Rate move - Feb 08

dannyboycey

Gorgeous_George wrote: »

What odds are the bookies offering for a 0.75% or 1% cut?

The chances of this are slim to none. After reading Mervyn King's speech, I would say he's hinted that there will be a quarter point cut next month but that's it for the foreseeable future as he can't allow inflation to rocket out of control. That's the way I read the situation.

A .75% cut could end up doing a hell of a lot more damage than good, especially if it fails to boost confidence. In fact, don't rule out a couple more rises before the year is out!!

dannyboycey

Gorgeous_George wrote: »

Oh yes, silly me. But, I have no desire to sell.

The property has increased 480% since 2001.

And a return to pre-2001 prices is not off the cards. There is even talk amongst some of the more bearish 'experts' that we could see a return to 1997-1998 prices. I suspect that if that happens, they will need to introduce a 'throwing up smiley' for the BTL'ers on here! :rotfl:

Turnbull2000

Gorgeous_George wrote: »

I don't understand why a LL would wish to subsidise a tenant's rent unless it is to offset gains elsewhere Maybe they are sadists (or is it masochists?).
GG

I'd imagine most of these investors (don't think they're worthy of being labelled landlords) who subsidise tenants each month view it the opposite way - that the tenants are subsidising the cost of a property that will provide either eventual capital gains or decent retirement income. Rent levels will one day catch up with mortgage payments, so they're basically getting a second or third property at a fraction of the total mortgage cost.

A 30 year old collegue at work who doesn't any pension provision has a similar view; 'so what if it costs me 300 quid a month, it's a bargain if I own it in the end!'. Same with many others of a similar age. Unless you're public sector, traditional private pension provision is now rare for those 30 under in my experience.

I'd be interested to know the demographics of those that piled in in recent years. If it's largely the 40+ group (particularly Baby Boomers), then many will either have very cheap mortages, own outright or have higher than average income levels. Plenty of scope (or delusion) to hold onto a depreciating property IMO.

Gorgeous_George

Just a week to go before the MPC announce their decision.

After US rates have been slashed by the Fed I expect the UK to cut rates. I will still guess at 0.5% cut but I wouldn't be surprised with anything that the MPC do. They may be the best we have but I fear they are just a bunch of blokes who find themselves at the top of their profession.

GG

HugoSP

I think rates will stay as they are.

Inflation is up and they may be hoping that the fed rate cut helps the UK economy and avoids the need for a BoE cut.

Gorgeous_George

That would be a fair shout too.

I think it doesn't matter what they do. Whatever will be, will be and other cliches.

GG

Rover

A .25% is all I can see GG, for the benefit of the economy in general, not HPI.
Merv's re-appointment should also signal that the MPC will be taking a harsh line with the Banks, the HPI bubble and inflation.

I know the markets were forecasting 3 rate drops this year, I believe this has now been throttled back to one?

I think Merv has a bit of integrity and his appointment will mean he outlasts the current Government's tenure.

SquatNow

Now he's been re-appointed he doesn't have to kiss browns a$$ anymore.

Expect rises not cuts.

alared

A .25 % cut is the very most I can see happening.

Pesonally I would like to see a 1% increase if not more.
I don`t see why we should bail out the greedy banks and people who have bitten off more than they can chew!

merlinthehappypig

O.25% from here as well, though I agree that he is less likely to make any politically driven moves now that he will be there long after Gordon Brown has gone.