Reply to: Should the BoE raise interest rates?

[Zoiderman]

The alternative, (admittedly minority), view is that putting up interest rates will force more people who can't really afford their homes to sell up. This will dramatically increase supply and force prices down, which will actually increase activity in the housing market. To me it's activity that's important to an economy, not capital value. My belief is that an economy where too much of the perceived wealth is held in residential property is not a good thing - the money should be "out there", stimulating business and creating jobs (and lucrative IT contracts).

Don't get me wrong, I believe this to be the truth. However, as an awful lot of people would quickly slip into negative equity, and these people vote for the government, it would be political suicide to do so, as most people will always look at their capital position as inclusdive of their equity, and ocne you get people thinking, fook me, if I look at my cc debt, bank loan, and value of house I am just aboput even after 10 years, then the incumbent gov will pay for it

[DimPrawn]

The ZIRP policy is merely delaying the inevitable collapse of this debt addicted economy.

20 years of stagflation awaits.

[doomage]

I think they should lower them some more, to stimulate the economy....

(I may or may not have a deeply entrenched vested interest).

To be honest, if they started putting up interest rates, the housing market, which, like it or not, is very important to the economy, would stall further. As the stamp duy holiday has ended, curtailing a lot of activity on the bottom end of the market, and a new mansion tax has started on the upper end of the market, effectively curtailing activity on the upper end, I don't think they'll now squeeze the middle. It would likely add £1000-2000 to the average mortgage if they do, and I really don't think Cameron is likely to want this, and whilst I understand the BoE is independent in action, in reality it isn't. What they will do, imo, is stamp on any new housing bubble, quickly, whilst not allowing the market to fall much at all, if not in real terms.

That's my take anyway.

The alternative, (admittedly minority), view is that putting up interest rates will force more people who can't really afford their homes to sell up. This will dramatically increase supply and force prices down, which will actually increase activity in the housing market. To me it's activity that's important to an economy, not capital value. My belief is that an economy where too much of the perceived wealth is held in residential property is not a good thing - the money should be "out there", stimulating business and creating jobs (and lucrative IT contracts).

[BrilloPad]

Moron.

Will that do?

Its a start. Thanks

[TimberWolf]

They should have raised them in 2001.

[MarillionFan]

On cuk! I don't believe it!

BTW where is assguru? I have not been called a cretin yet and I am starting to feel a bit peaky.....

Moron.

Will that do?

[BrilloPad]

I was being facetious BP (I have 3 mortgages)

On cuk! I don't believe it!

BTW where is assguru? I have not been called a cretin yet and I am starting to feel a bit peaky.....

[TimberWolf]

IMO the USD is the 2nd reserve ccy of the world. The first is London property.

LOL. Let's see.

[Zoiderman]

I disagree. the issue is that bank are not lending. further stimulus will not work - well I suppose it would inflate away the debt.

I was being facetious BP (I have 3 mortgages)

[MarillionFan]

Anyone on a tracker is going to say NO!!!!!

I am one of them.

WHS. But I can take a rise to 3% before having to pay any interest.

[BrilloPad]

I think they should lower them some more, to stimulate the economy....

I disagree. the issue is that bank are not lending. further stimulus will not work - well I suppose it would inflate away the debt.

a new mansion tax has started on the upper end of the market, effectively curtailing activity on the upper end

IMO the USD is the 2nd reserve ccy of the world. The first is London property.

I understand the BoE is independent in action, in reality it isn't. What they will do, imo, is stamp on any new housing bubble, quickly, whilst not allowing the market to fall much at all, if not in real terms.

I agree strongly with that. Though it will be interesting to see how they stamp on it.

[Scrag Meister]

Anyone on a tracker is going to say NO!!!!!

I am one of them.

[Zoiderman]

I think they should lower them some more, to stimulate the economy....

(I may or may not have a deeply entrenched vested interest).

To be honest, if they started putting up interest rates, the housing market, which, like it or not, is very important to the economy, would stall further. As the stamp duy holiday has ended, curtailing a lot of activity on the bottom end of the market, and a new mansion tax has started on the upper end of the market, effectively curtailing activity on the upper end, I don't think they'll now squeeze the middle. It would likely add £1000-2000 to the average mortgage if they do, and I really don't think Cameron is likely to want this, and whilst I understand the BoE is independent in action, in reality it isn't. What they will do, imo, is stamp on any new housing bubble, quickly, whilst not allowing the market to fall much at all, if not in real terms.

That's my take anyway.

[BrilloPad]

They should stay at .5%. I'm making an 8k a year profit on my mortgage at this rate. Long may it continue.

So its not just admin you now control - but Mervyn King too? Your rise up the greasy pole is too quick - are we going to start having to be nice to you?

[MarillionFan]

They should stay at .5%. I'm making an 8k a year profit on my mortgage at this rate. Long may it continue.