House Prices Crash

LOL. "reports" that you havent bothered to post here.

Doomed, doomed, we are all doomed.

What drop? Where?

All the indications from reputable sources are that a continued high demand and a shortage of housing is still propping up the inflated prices of houses.

On the contrary. There was news in the last few days that currently west country house price rises are the highest in the U.K.

And now that inflation is dropping you can expect interest rates to fall again creating more price increases.

What? General inflation is rising, and likely to go higher still with this Govts excessive and wasteful spending. Crude hitting 70 Dollars a barrel will also add to the pressure. I'd say we're in for a few increases in i rates, and this when unemployment is also beginning to climb alarmingly and personal debt is at worrying levels. I'd say the Torries or Gordon Brown (if next PM) will have a nightmare in office in a few years time. Irma

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You and I know that inflation is rising, but you can rest assured that this government will ensure that the figures are massaged to show that it is not.

E.g. inflation for the year to March was 1.8% according to the governments latest basket.... The old RPI shows 2.4%!

If it shows signs of rising too much above the target, look out for a new basket which better reflects current purchasing patterns....

Well you'd be wrong, if anything they are likely to drop.

On what grounds? The Bank of England's remit was changed many years ago to target inflation (I think it's a 2.5% target). Above that and rates have to go up. Irma

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They can only hide so much. The rise in the gold price tells us that too much currency has been printed and that the value of the fake currency is falling against real money.

FoFP

I'm not suggesting that they will actually be hiding anything. They just tell us some bollocks which we know isnt true, then they tell us that we will have to wait and see before decrying it.... a bit like Charles Clarkes' new measures to prevent pedophiles raping 9 year old kids.... every time a minister opens his mouth we know that he is usually either lying, or trying to hide something, and we also know what he is trying to hide

The bank of England wont kick up a fuss as they know that their powers can be removed at the stroke of a pen..

The target is 2% with a 0.5% leeway either side (1.5% - 2.5%).

But with inflation at 1.8% there is still a lot of room for manoeuvre. I cannot see, from this point, how interest rates can possibly rise past 4.5% for the rest of the year. Not including house prices in the figure has arguably caused the house price spike however.

RPI is 2.4% Irma

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"Irma Troll" wrote

What's that got to do with anything? BoE don't track RPI anymore...

Which doesn't effect the BOE decision. Interest rates are low and look to stay low for the foreseeable future.

On the grounds that inflation is falling, contrary to your beliefs. Check the news.

"The unexpectedly large fall in inflation is likely to increase calls for the Bank of England to reduce interest rates."

You may disagree that inflation is falling, and you may be correct, but the BOE is measured against the published rate and not your beliefs or even experience :-)

I had to laugh at the 5th para which starts; "Thursday's figures came as a surprise to economists...."

IME, most things do.

What the bank track is not the whole point - it's what the market thinks or does. With the Govt having to finance it's massive debt through the sale of gilts, this will undoubtedly put upward pressure on long term rates, regardless of bank action. If you can't see the point, just look back at when the Govt (via the BoE) tried to play God with Sterling and the resulting ERM fiasco - meaning that the market sets rates, NOT the BoE.

Irma

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That was in a time when the govt set rates,and also tried to keep Sterling at a certain rate v the dollar. All that is *long* gone. And contrary to your expectations, what the market thinks is "the bank is driven by the CPI, the CPI is falling, therefore rates will fall" .

Just go read the financial pages rather than dreaming up your own version (up to 25 years old re who set rates and what was tracked) of what will happen. Everyone (except you it seems) expects rates not to rise, and probably to fall slightly.

You're getting the point now - the market never moves with the consensus view. Irma

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