Interest Rates Wordwide

[noirua]

The UK., Bank of England, raised interest rates from 5% to 5.25%, 40 minutes ago.

 

[wayneL]

The UK., Bank of England, raised interest rates from 5% to 5.25%, 40 minutes ago.

LOL. A surprise attack from the B of E. :bigun2:

The almost unanimous consensus was no rise this year!!!!

The few hawks thought no rise till feb at least.

Perhaps the B of E is finally taking their remit seriously.

Cheers

 

[wayneL]

0.25% is a big shock?

0.25% FFS!!!

 

[It's Snake Pliskin]

LOL. A surprise attack from the B of E. :bigun2:

The almost unanimous consensus was no rise this year!!!!

The few hawks thought no rise till feb at least.

Perhaps the B of E is finally taking their remit seriously.

Cheers

Wayne nice usage of the smilies there! Are you against the rise or for it?

 

[wayneL]

Wayne nice usage of the smilies there! Are you against the rise or for it?

Mixed feelings Snake.

Economically for it... and much more after this.

But good people who have been sucked in by VI spin will get hurt. I feel for them.

I'm angry the RE bubble has been allowed to get out of control with rates kept artificially low for too long.

 

[bvbfan]

Wonder if it will have any impact on the election there?
Or at the English a little bit smarter?

Maybe Johnny can claim another rate rise by Labor Party :

It will be interesting to see the minutes from BOE, I hadn't expected it so wasn't watching FX at the time.

And now the jobs data here putting more pressure on Aussie rates too.

 

[wayneL]

Wonder if it will have any impact on the election there?
Or at the English a little bit smarter?

Yep and Nope.

Nulab are toast at the next election, especially with Crash Gordon at the helm. (This will be to the delight of Tony bLIAR)

But the Tories are by no means a shoe in... the result could surprise

 

[tech/a]

The inside info is that its punishment for a 5 zip loss in the ashes!!

 

[wayneL]

This has cause a bit of panic in the land of the poms it has.

The Sun is pleading with people to not panic!! Which of course will make people panic even more.

The UK bond markets were caught completely of guard.

We'll add the UK to the growing list of RE crash countries, shall we?

 

[theasxgorilla]

The UK., Bank of England, raised interest rates from 5% to 5.25%, 40 minutes ago.

Seems like the city-folk can afford it...

 

[theasxgorilla]

We'll add the UK to the growing list of RE crash countries, shall we?

Just out of curiosity, which other countries are on the list?

 

[theasxgorilla]

An interesting read in response to the interest rate increase by BoE from Danske (Danish) Bank Reseach:

Bank of England as role model?
Economic developments in the UK are – for better or worse – an extreme version of developments in the western world over the past ten years. The UK has seen the greatest boom in house prices – especially in the major cities. The UK has undergone a substantial – and successful – de-industrialisation. And the UK has successfully liberalised its goods and labour markets, and been rewarded with a sustained upswing.
The UK is also in many ways ahead in cyclical trends. The Bank of England was already taking action back in 2004 to calm the wild housing market. In contrast to other central banks, the BoE has thus explicitly at-tempted to slow house price growth and this was why the UK saw a turnaround in the housing market al-ready back in 2005. The consensus at the time was that the bubble had burst, that the UK was the first country to wake up with a hangover after the housing party, and that the BoE would have to cut rates sharply.
If one accepts that the UK has been the vanguard in this upswing, it is noteworthy that the BoE is again tightening monetary policy. The collapse of the UK housing market never materialised, despite some heady prices. Instead, home prices underwent a soft landing in 2005-6 that has been overtaken by renewed house price appreciation in the past six months. The past week’s surprise rate hike to 5.25% is a reminder that the housing boom in the West is not a bubble, but rather a symptom of low borrowing costs and a strong labour market. The BoE hike is also a reminder that the slowdown in US housing is no guarantee that the US Federal Reserve is finished raising rates in this cycle.

 

[Smurf1976]

Buying a relatively illiquid asset at roughly doubly it's historic average valuation underpinned by interest rates at historic lows would have to be one of the highest risk strategies around.

Another UK house price crash is underway in my opinion and I'm seeing exactly the same thing much closer to home too. Only question is how long it takes and to what extent general inflation masks the crash in prices.

Just think, I could have bought a nice little house down here in Tassie 3 years ago. Or I could now pay the exact same price and move one suburb closer to the city, get brick instead of weatherboard, a pool and 20% more house and land too. And with 90 day bank bills pointing to another rate rise soon in Australia, the bottom is unlikely to be found for some time yet.

But I do think the banks are waking up at last. Why else would there be property developers willing to pay 18% to borrow money privately when banks charge half that rate? The only possible explanation is the banks are saying no...

 

[YChromozome]

The UK has seen the greatest boom in house prices.

The frightening thing is I don't think Australia is much worse.

Based on OECD figures indexed to 1970, UK real house prices have increased to approximately 220. Australia's house prices over that same time has increased to about 190.

But real prices have little relevance, price to income ratios paint a better picture - if wages have risen enough to allow home owners to service the increased debt. Over the same time the price to income ratio of the UK has peaked about 150, while Australia peaked at 160 and interestingly has fallen a little.

Also note these figures only paint a picture up to 2005.

 

[YOUNG_TRADER]

If one accepts that the UK has been the vanguard in this upswing, it is noteworthy that the BoE is again tightening monetary policy. The collapse of the UK housing market never materialised, despite some heady prices. Instead, home prices underwent a soft landing in 2005-6 that has been overtaken by renewed house price appreciation in the past six months. The past week’s surprise rate hike to 5.25% is a reminder that the housing boom in the West is not a bubble, but rather a symptom of low borrowing costs and a strong labour market. The BoE hike is also a reminder that the slowdown in US housing is no guarantee that the US Federal Reserve is finished raising rates in this cycle.

Strange, very similar to whats happned in Aust as an avg (ie pullbacks in Vic an NSW, growth in W.A, Qld and S.A. forget about N.T. and Tassie

I reckon US will have soft landing as well, NEVER UNDERESTIMATE THE US CONSUMER!

 

[YChromozome]

NEVER UNDERESTIMATE THE US CONSUMER!

48 months interest free must run out one day . . .

 

[noirua]

Japanese mini rise in interest rates: http://www.iht.com/articles/2007/02/21/business/yen.php

 

[noirua]

The European Union have raised interest rates from 3.5% to 3.75%, citing inflation pressures.

 

[noirua]

China has raised interest rates to 6.39% from 6.14%.

 

[theasxgorilla]

48 months interest free must run out one day . . .

Yeah, but imagine what the relative cost base will be after 48 months of inflation Buy now, pay nothing for 48 months and get a 15% discount!