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

IanRR

House prices are falling??? Despite the media rubbish headlines, OFFICIAL figures show that house prices went UP by 0.7% last month. But that was hidden in 2 lines on page 32!!! When are we ever going to learn that the only news is bad news? It is all written to sell newspapers, not present us with facts. And all the people with money, are laughing as they buy your houses at 25% less than they are worth. It is all about perceptions folks..... Interest rates will rise, and the credit crunch will last until September 2009. If you have any savings, buy now, and watch the profits roll in, just over a year from now. We will soon forget all about this blip. We are building 96 FEWER houses, than we need, each day. Just imagine what will happen to house prices in 2010..... Time to wake up people, before the rich rob you-AGAIN!

SuperV

Quote:
"Despite the media rubbish headlines, OFFICIAL figures show that house prices went UP by 0.7% last month"

Annually )))

Today M&S shares dived 24%. Not so few stories about house prices - houses sold for 650k few months ago are worth 600k today.

BoE interest rate is high as it can control only British internal drivers of inflation - family budgets, not oil. And family budgets are already under pressure.

ManAtHome

Hang on a mo - el banko d'troosers have dropped rates by 0.75% over the last 6 months - has oil/petrol gone down, has food gone down, have mortgages gone down, have credit card rates gone down..?

To repeat what several other posters have asked - who will benefit apart from easing things for the minority of over-commited el banko linked rates borrowers?

inca_2

so if house prices are not falling as you claim then how is it that there are people in negative equity?

SuperV

Quote:
"Hang on a mo - el banko d'troosers have dropped rates by 0.75% over the last 6 months - has oil/petrol gone down, has food gone down, have mortgages gone down, have credit card rates gone down..?"

Price of oil is not affected by what BoE does. Oil price affects food price. Mortgages are not affected so much by BoE basic rate as by Libor rate (at least that is an excuse) and banks have to recover from sub-mortgage bats in the US (just imagine what will happen with Libor when they start to write down mortgages in the UK), credit card rates are going up because of Libor and write-downs as well (yes, banks will charge everyone more...).

As I said - everyone will benefit (some more, some less) and only few speculators will NOT benefit. Small potatoes can't benefit in a storm...

ManAtHome

From surreal to total borrocks then..?

SuperV

From boom (due to cheap imports) to bust (due to high price of oil). Overheated to frozen economy.

SuperV

Why will everyone benefit from lower interest rate and only slightly higher inflation?

Housing market gamblers (levered debt private equity investors...) will not be able to take any kind of equity out of their properties - the prices will stall. Economy will pick up and the others will be able to invest in stock market.

Banks will not have to write-down huge amounts and will not have to increase their interest rates (for everybody).

ziknik

SuperV wrote: »

Ziknik,

It is PM's job to define how the inflation is calculated (as pointed out before in one of the posts) and to define target inflation as well.

King may do a great job as you say, but I don't think so. There won't be money even for Banking Cartel as they will have to write down huge amounts. Not only on mortgages, but also credit cards, other kind of credits like credits for cars, furniture, kitchens, holidays.

The debt of the whole UK is how much, few trillions? Mark it 20% down, maybe more. It can get worse than in Japan.

Don’t worry about the Bank Cartel. They will be just fine. The Tax Payer will make sure they’re OK.

SuperV

Quote:
"Don’t worry about the Bank Cartel. They will be just fine. The Tax Payer will make sure they’re OK."

You will need their help if you want this to work. They pay a lot of tax.