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Carney warns no-deal could see house prices plunge

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    Carney warns no-deal could see house prices plunge

    35%! More like 50%.

    A correction is only complete when prices fall back to normal 3 times average salary. You know it makes sense.


    The Bank of England's governor has warned the cabinet that a chaotic no-deal Brexit could crash house prices and send another financial shock through the economy.

    Mark Carney met senior ministers on Thursday to discuss the risks of a disorderly exit from the EU.

    His worst-case scenario was that house prices could fall as much as 35% over three years, a source told the BBC.

    The comments are likely to spark anger amongst Brexiteers.

    There were also widespread reports that the governor told the Downing Street meeting that mortgage rates could spiral, the pound and inflation could fall, and countless homeowners could be left in negative equity.

    According to the Financial Times a source told the paper that all Mr Carney's predictions were "grim" and "chilling". The FT said the governor took questions from ministers, but there was no hostility.

    However, The Sun had a different take on the meeting, reporting that Home Secretary Sajid Javid and Health Secretary Matt Hancock "ripped into" Mr Carney because of his doom-laden briefing.

    Mr Carney, who has just agreed to stay on as governor of the central bank until 2020, has faced strong criticism in the past, with Brexiteers accusing him of being part of the Remain camp.

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    Thursday's briefing is not the first time Mr Carney has warned that a disorderly Brexit could spark an economic shock, and it echoes some of the Bank's previous forecasts.

    The Bank's latest annual "stress test" of the UK financial system in November warned of a 33% fall in house prices in a worst case scenario.

    In August Mr Carney told the BBC that the risk of a no-deal Brexit was "uncomfortably high".

    That comment prompted leading Tory eurosceptic Jacob Rees-Mogg to call Mr Carney "the high priest of Project Fear", while former minister Iain Duncan Smith said "there is no such thing as a no-deal" and the Bank "struggled to understand how this would work".

    Following the Downing Street meeting, the Prime Minister's official spokesman said ministers remain confident of a Brexit deal, but agreed to "ramp up" their no-deal planning.

    "As a responsible government, we need to plan for every eventuality. The Cabinet agreed that no-deal remains an unlikely but possible scenario in six months' time," the spokesman said.

    The Bank of England declined to comment.
    source: https://www.bbc.com/news/business-45516678
    "Never argue with stupid people, they will drag you down to their level and beat you with experience". Mark Twain

    #2
    Carney warns no-deal could see house prices plunge

    Originally posted by scooterscot View Post
    35%! More like 50%.

    A correction is only complete when prices fall back to normal 3 times average salary. You know it makes sense.




    source: https://www.bbc.com/news/business-45516678
    Sorry to disappoint, but this looks to be fake news from the BBC.

    By all accounts the statement from Carney to the cabinet was about the Bank’s regular stress testing. He’s factored Brexit in, but this is intended to model the absolute worst case scenario (I.e no intervention from treasury, central banks, etc). It’s not a statement from Carney about any likely scenario, it’s simply to stress test the ability of central banks to cope and to model scenarios to devise possible interventions.

    Comment


      #3
      Sorry is he trying to persuade or disuade people. Because housing market argument is damn compelling...

      Comment


        #4
        Terrible news. Only 50%? Its not nearly enough to help the young who cannot afford to get on the ladder.

        Lets force any foreigners who own property in the UK to sell. 100% tax on rental income. Actually, lets make it 125%.

        And all those f**kers who left the UK can either move back or sell up.

        Lets give the young something to work for.

        I was listening to Farage last night. He said he has no idea if UK will do will or badly after Brexit. And neither does anyone else. And he does not care either way.

        Comment


          #5
          I am actually already postponing buying another house as I'm hoping prices will fall after brexit

          Comment


            #6
            Originally posted by Eirikur View Post
            I am actually already postponing buying another house as I'm hoping prices will fall after brexit
            You can only live in one house. So why bother. Greedy f**ker. A pox on both your houses.

            Comment


              #7
              Originally posted by GreenMirror View Post
              You can only live in one house. So why bother. Greedy f**ker. A pox on both your houses.
              I've got 3 spread over 2 continents. Just completed on the 3rd yesterday.
              Anyway, calling people "Greedy f**ker", weren't you the one who tried some sort of tax evasion scheme?
              Hard Brexit now!
              #prayfornodeal

              Comment


                #8
                Originally posted by Eirikur View Post
                I am actually already postponing buying another house as I'm hoping prices will fall after brexit
                Will be looking to increase my BTL portfolio if property drops - win-win Who doesn't like a bit of passive income from property All those people losing their homes as they lose their jobs will need somewhere to live, and landlords can pick up nice and cheap property from bank repos

                Brexit, keeps on giving.

                Thinking about it, why didn't I vote leave when there are all these positives for those of us with plenty of cash?
                I am what I drink, and I'm a bitter man

                Comment


                  #9
                  Originally posted by Whorty View Post
                  Thinking about it, why didn't I vote leave when there are all these positives for those of us with plenty of cash?
                  Indeed, especially if you live abroad. If there was a new referendum now, I'd vote Leave. Seriously.
                  Hard Brexit now!
                  #prayfornodeal

                  Comment


                    #10
                    Originally posted by sasguru View Post
                    Indeed, especially if you live abroad. If there was a new referendum now, I'd vote Leave. Seriously.
                    WHS

                    ...and I want to see a full blown US trade war with China, just for educational purposes.

                    I'm alright Jack

                    Comment

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