Perhaps the UK economy is slipping towards Japanese style deflation but you can't fault the Bank of England for acting. After years of glacial movements in base rates, the central bank has quickly cut base rates by 2.5 percentage points. Obviously, if they fall to zero from the current level of 2 pct then we are in Japanese territory.
www.searchaccountant.co.uk
At the height of the Japanese property bubble the Emperor's palace in Tokyo had a valuation equivalent to California. Hopefully, the adjustment in British property values will not have to be so severe. The one problem is the electoral cycle here with the Gordon Brown government trying to limit the impact of the residential property decline, which is ultra important for voters.
Showing posts with label interest rates. Show all posts
Showing posts with label interest rates. Show all posts
Friday, 5 December 2008
Thursday, 6 March 2008
Are UK interest rates too high at 5.25 pct?
Are British interest rates too high at 5.25 percent? They do not seem to be
supporting the pound against the euro, which seems to be on its way to 80 pence.
It just makes that French holiday gite much more expensive this summer.
Obviously, the Bank of England is concerned about inflation but lower interest
rates are needed to revive the UK economy. House prices are going down not helped
by lenders tightening their criteria for loans. It looks like the 100 pct mortgage
loan is disappearing fast, which will not help first-time buyers, who are crucial
for the housing market.
The European Central Bank is maintaining rates at 4 percent but expects higher
inflation due to energy prices. Inflation for 2008 should be between 2.6 percent
and 3.2 percent.
supporting the pound against the euro, which seems to be on its way to 80 pence.
It just makes that French holiday gite much more expensive this summer.
Obviously, the Bank of England is concerned about inflation but lower interest
rates are needed to revive the UK economy. House prices are going down not helped
by lenders tightening their criteria for loans. It looks like the 100 pct mortgage
loan is disappearing fast, which will not help first-time buyers, who are crucial
for the housing market.
The European Central Bank is maintaining rates at 4 percent but expects higher
inflation due to energy prices. Inflation for 2008 should be between 2.6 percent
and 3.2 percent.
Thursday, 7 February 2008
Bank of England cuts interest rates by quarter point.
The Bank of England has cut interest rates by a quarter of a point today (Thursday, February 7th) to 5.25 pct from 5.5 pct. Will it make a difference to the UK economy? Former Deputy Governor of the Bank of England,
Sir Howard Davies, forecasts that there will be either a slowdown or
recession whatever happens.
Davies is Director of the London School of Economics and has had a wide career. He even supports Manchester City hailing from the great city.
Today (Thursday) the Bank of England said inflation risks had worsened. So why did'nt the bank lift interest rates? I suppose we have got ourselves in a bit of a hole. The U.S Federal Reserve has been ignoring its inflation risks as well by cutting interest rates.
Sir Howard Davies, forecasts that there will be either a slowdown or
recession whatever happens.
Davies is Director of the London School of Economics and has had a wide career. He even supports Manchester City hailing from the great city.
Today (Thursday) the Bank of England said inflation risks had worsened. So why did'nt the bank lift interest rates? I suppose we have got ourselves in a bit of a hole. The U.S Federal Reserve has been ignoring its inflation risks as well by cutting interest rates.
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