Interest Rates - BoE should cut them or the governer should go!

SuperV

wisbech_lad wrote: »

LOL! In Zimbabwe house prices are now measured in the quadrillions of dollars. Obviously this mean that lots of dollars are needed, and so the Zimbabwe dollar is a pillar of strength!

In general, SuperV, more of a currency = a weaker currency. Supply and demand and all that

Again missing the point...

And proving mine ))

The bigger demand for the currency, the stronger currency )) Supply and demand.

At the moment, there isn't such a strong demand to get pounds - what to do with them? Buy a house? Invest in economy?

Or sell property portfolio and convert pounds into euro, dollar, yen? The bigger supply of sterling is, the weaker the currency is - as you say.

SuperV

[FONT=Verdana, Arial, Helvetica, sans-serif][FONT=Verdana, Arial, Helvetica, sans-serif]"A new report by uSwitch has revealed that disposable income has dropped for the first time since 1997 in cash terms. UK households are £2,500[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif][/FONT][FONT=Verdana, Arial, Helvetica, sans-serif] worse off this year compared to 2007.

Driving this drop is the huge increases in essential living costs which has left households being forced to find an extra £145[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif][/FONT][FONT=Verdana, Arial, Helvetica, sans-serif] a month to cover rising bills."

And a mortgage on top...
[/FONT][/FONT]

SuperV

For all those Inflation Scared...

"The Friedman-Lucas emphasis on inflation expectations was a model suited to different times. Central bankers no longer try to ramp growth by springing inflation surprises on unwitting workers. Unionisation has declined, automatic cost-of-living adjustments are rare, globalisation has reduced pricing power for most companies and bargaining power for most workers. Today, advanced economies are confronted with stagnating growth, collapsing housing markets, slowing world trade, stressed financial systems, and weak household balance sheets. This is not the 1970s. Broad-based price and wage inflation is unlikely today. We should therefore be sceptical of the case for tighter monetary policies based on models developed in, and better suited for, a bygone era."

http://www.ft.com/cms/s/0/ec9b82e4-71d8-11dd-a44a-0000779fd18c.html

by By Larry Hatheway, chief economist at UBS

SuperV

" House price plunge fuels recession fear
Warning that two million may be out of work by Christmas
Fears of recession this winter intensified yesterday after the CBI reported the weakest high street activity in 25 years, the Nationwide building society said house prices were falling at £150 a day and a Bank of England policymaker warned of two million unemployed by Christmas.
Amid predictions that 2009 could witness the first year of falling output in Britain since 1991, government hopes of mounting an autumn political comeback suffered a setback when employers' organisation the CBI and Nationwide both said they saw no let-up in the tough conditions facing retailers and the property market."

http://www.guardian.co.uk/money/2008/aug/29/houseprices.property


Cut the rate!

bigturnip

Cut the thread!

SuperV

"Two million people may be out of work by Christmas and house prices will fall by 30% if interest rates are not cut, a Bank of England policymaker has warned.

Professor David Blanchflower, a member of the Bank's Monetary Policy Committee (MPC), told Reuters that big cuts in rates were needed to stave off a slump.
"

http://news.bbc.co.uk/1/hi/business/7588132.stm

CUT THE RATE!

SuperV

bigturnip wrote: »

Cut the thread!

Don't read it...

SuperV

The Times: Pound hits 12-year low on rate cut speculation
FT: Recession fears send sterling to new low

And the correct answer is....

SuperV

"People need to understand that sometimes you will have to focus on the timing of issues. I think people have become complacent and they have not understood what would happen if an economy starts to slow fast, if firms start to close. What we have now is a turning point in many ways – certainly you might think of it as a paradigm shift. We have a global financial crisis, an oil shock coming [and] people with little experience of what is really going on."

Mr Blanchflower (http://www.independent.co.uk/news/business/news/warning-cut-rates-or-job-losses-will-soar-912312.html)

It seems that the end of summer is the turning point as I predicted.

aardvaak

bigturnip wrote: »

Cut the thread!

Yes I agree this thread is getting silly!