BREXIT - Is This Really Still Rumbling On? 😴
Comments
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German economy is about 5% smaller (relative to the UK's) than it was six months ago.wallace_and_gromit said:
The reason he was wrong is the reason such comparisons are done on a PPP basis and have been for donkeys’ years.rick_chasey said:He wasn’t wrong though was he? People just objected to the usefulness of the stat.
(I don't think this is a meaningful stat).0 -
Funny that he hasn't mentioned it...wallace_and_gromit said:
The key point though is that a domestic economy is only partially affected by exchange rates. Evidence: 20% plus fall in crate post eu-ref eventually only resulted in a brief blip in the U.K. inflation rate to 4%. In Carney world, inflation would have been 20% higher (or 10% higher for two years etc.)rick_chasey said:He wasn’t wrong though was he? People just objected to the usefulness of the stat.
He’s not mentioned the improvement in the UK’s relative economic size since the exchange rate moved in sterling’s favour (circa 1.05 $ per £ to nearly 1.3 $ per £) which is very telling."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Right. I find this argument annoying, because he was correct when he said it. In the way that he said it. In the context, it was said amongst a host of other indicators, right?wallace_and_gromit said:
The key point though is that a domestic economy is only partially affected by exchange rates. Evidence: 20% plus fall in crate post eu-ref eventually only resulted in a brief blip in the U.K. inflation rate to 4%. In Carney world, inflation would have been 20% higher (or 10% higher for two years etc.)rick_chasey said:He wasn’t wrong though was he? People just objected to the usefulness of the stat.
He’s not mentioned the improvement in the UK’s relative economic size since the exchange rate moved in sterling’s favour (circa 1.05 $ per £ to nearly 1.3 $ per £) which is very telling.
If you’re gonna bin him off for mentioning something that is correct in a lunch with the FT that isn’t exactly the measure you use but the journo picked it out and call it a “clanger” then heavens knows what you think of any and everyone else that’s commented on the topic.
It wasn’t a speech was it? It was a lunch with the FT.
And the UK’s post covid recovery has been the worst of all G7. That is not disputable.0 -
Yes.wallace_and_gromit said:
Even with the nonsense he spouted about relative sizes of economies? That was painful to read.surrey_commuter said:
LOL - he was right about Brexit and remains one of the most high profile and credible voices on macro economics.Stevo_666 said:
Agree, he has lost a lot of fredibility after his Germany vs UK growth claim, which was a major piece of Eurobollox. Also it is clear that he is not objective or neutral.wallace_and_gromit said:
IIRC Carney got a serious shoeing in various quarters for his claim that the German economy was now 25% larger relatively than the UK’s post-Brexit. There were some quite heavyweight pro-remain economists involved in the shoeing as there were some very contentious, cherry-picked assumptions involved involving exchange rates. He’s been very quiet about this since the GBP exchange rates have recovered since the depths of the truss era, where he conveniently picked his end point.rick_chasey said:He got quite some heat for saying that on here last time I believe.
His general pre-referendum pessimism is warranted, but as with some on the remain side, he has overplayed his hand somewhat. I’m only one data point, but despite being pro-Carney from his BoE days and very sympathetic to his side of the Brexit argument, I no longer take him seriously.
Name others0 -
I think I was the person who originally called it out but don’t remember being harangued for itwallace_and_gromit said:
But that’s down to a percent here or there. Carney was in the 25% region and failing epically. If he was that far wide of the mark as a brexiteer economist he would get a pasting here. Being generally on the right side of the argument re brexit and economics doesn’t mean that every brexit related economic argument you put forward is automatically correct.rick_chasey said:
Everyone who’s sensible recognises Britain is the only g7 country to not recover from the pandemic levels.Stevo_666 said:
Have you what he spouted about the UKs growth rate/change in size of economy over time relative to Germany? I think all but the most naive EU flag shaggers saw through that.surrey_commuter said:
LOL - he was right about Brexit and remains one of the most high profile and credible voices on macro economics.Stevo_666 said:
Agree, he has lost a lot of fredibility after his Germany vs UK growth claim, which was a major piece of Eurobollox. Also it is clear that he is not objective or neutral.wallace_and_gromit said:
IIRC Carney got a serious shoeing in various quarters for his claim that the German economy was now 25% larger relatively than the UK’s post-Brexit. There were some quite heavyweight pro-remain economists involved in the shoeing as there were some very contentious, cherry-picked assumptions involved involving exchange rates. He’s been very quiet about this since the GBP exchange rates have recovered since the depths of the truss era, where he conveniently picked his end point.rick_chasey said:He got quite some heat for saying that on here last time I believe.
His general pre-referendum pessimism is warranted, but as with some on the remain side, he has overplayed his hand somewhat. I’m only one data point, but despite being pro-Carney from his BoE days and very sympathetic to his side of the Brexit argument, I no longer take him seriously.
Probs most sensible to acknowledge Carney dropped a clanger on that point and move on!0 -
It was misleading in that it that it exaggerated the differential in overall performance between the UK and other countries. That parts of what he said were accurate doesn't cover for overstating another part. Being qualitatively right but off on the numbers is not just semantics. And the venue at which the comments were made is irrelevant: it wasn't a private chat between friends.rick_chasey said:
Right. I find this argument annoying, because he was correct when he said it. In the way that he said it. In the context, it was said amongst a host of other indicators, right?wallace_and_gromit said:
The key point though is that a domestic economy is only partially affected by exchange rates. Evidence: 20% plus fall in crate post eu-ref eventually only resulted in a brief blip in the U.K. inflation rate to 4%. In Carney world, inflation would have been 20% higher (or 10% higher for two years etc.)rick_chasey said:He wasn’t wrong though was he? People just objected to the usefulness of the stat.
He’s not mentioned the improvement in the UK’s relative economic size since the exchange rate moved in sterling’s favour (circa 1.05 $ per £ to nearly 1.3 $ per £) which is very telling.
If you’re gonna bin him off for mentioning something that is correct in a lunch with the FT that isn’t exactly the measure you use but the journo picked it out and call it a “clanger” then heavens knows what you think of any and everyone else that’s commented on the topic.
It wasn’t a speech was it? It was a lunch with the FT.
And the UK’s post covid recovery has been the worst of all G7. That is not disputable.
FWIW, I also don't think you should ignore everything he says because of one dubious statement. If we applied that rule we'd never listen to anything anyone said. The mistake was in giving those with opposing views a 'gotcha' quote they could use to discredit everything else he has said.1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition1 -
Indeed. If one is being rational rather than ideological / tribal, then all statements should be taken on their merits / demerits.rjsterry said:
FWIW, I also don't think you should ignore everything he says because of one dubious statement. If we applied that rule we'd never listen to anything anyone said. The mistake was in giving those with opposing views a 'gotcha' quote they could use to discredit everything else he has said.rick_chasey said:
Right. I find this argument annoying, because he was correct when he said it. In the way that he said it. In the context, it was said amongst a host of other indicators, right?wallace_and_gromit said:
The key point though is that a domestic economy is only partially affected by exchange rates. Evidence: 20% plus fall in crate post eu-ref eventually only resulted in a brief blip in the U.K. inflation rate to 4%. In Carney world, inflation would have been 20% higher (or 10% higher for two years etc.)rick_chasey said:He wasn’t wrong though was he? People just objected to the usefulness of the stat.
He’s not mentioned the improvement in the UK’s relative economic size since the exchange rate moved in sterling’s favour (circa 1.05 $ per £ to nearly 1.3 $ per £) which is very telling.
If you’re gonna bin him off for mentioning something that is correct in a lunch with the FT that isn’t exactly the measure you use but the journo picked it out and call it a “clanger” then heavens knows what you think of any and everyone else that’s commented on the topic.
It wasn’t a speech was it? It was a lunch with the FT.
And the UK’s post covid recovery has been the worst of all G7. That is not disputable.
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Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/0 -
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.0 -
Name other what?surrey_commuter said:
Yes.wallace_and_gromit said:
Even with the nonsense he spouted about relative sizes of economies? That was painful to read.surrey_commuter said:
LOL - he was right about Brexit and remains one of the most high profile and credible voices on macro economics.Stevo_666 said:
Agree, he has lost a lot of fredibility after his Germany vs UK growth claim, which was a major piece of Eurobollox. Also it is clear that he is not objective or neutral.wallace_and_gromit said:
IIRC Carney got a serious shoeing in various quarters for his claim that the German economy was now 25% larger relatively than the UK’s post-Brexit. There were some quite heavyweight pro-remain economists involved in the shoeing as there were some very contentious, cherry-picked assumptions involved involving exchange rates. He’s been very quiet about this since the GBP exchange rates have recovered since the depths of the truss era, where he conveniently picked his end point.rick_chasey said:He got quite some heat for saying that on here last time I believe.
His general pre-referendum pessimism is warranted, but as with some on the remain side, he has overplayed his hand somewhat. I’m only one data point, but despite being pro-Carney from his BoE days and very sympathetic to his side of the Brexit argument, I no longer take him seriously.
Name others0 -
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.0 -
He wrote a book on how neoclassical economics is wrong so I doubt he's much of a subscriber to Friedman's views in general. He's arguing here that QE inflated house prices and left Britain over sensitive to rate rises, which doesn't really follow, as surely if everyone was less leveraged, the BoE would have raised rates more aggressively to account for the same necessary pain to curb inflation?TheBigBean said:
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.0 -
name other, more credible, economic commentatorswallace_and_gromit said:
Name other what?surrey_commuter said:
Yes.wallace_and_gromit said:
Even with the nonsense he spouted about relative sizes of economies? That was painful to read.surrey_commuter said:
LOL - he was right about Brexit and remains one of the most high profile and credible voices on macro economics.Stevo_666 said:
Agree, he has lost a lot of fredibility after his Germany vs UK growth claim, which was a major piece of Eurobollox. Also it is clear that he is not objective or neutral.wallace_and_gromit said:
IIRC Carney got a serious shoeing in various quarters for his claim that the German economy was now 25% larger relatively than the UK’s post-Brexit. There were some quite heavyweight pro-remain economists involved in the shoeing as there were some very contentious, cherry-picked assumptions involved involving exchange rates. He’s been very quiet about this since the GBP exchange rates have recovered since the depths of the truss era, where he conveniently picked his end point.rick_chasey said:He got quite some heat for saying that on here last time I believe.
His general pre-referendum pessimism is warranted, but as with some on the remain side, he has overplayed his hand somewhat. I’m only one data point, but despite being pro-Carney from his BoE days and very sympathetic to his side of the Brexit argument, I no longer take him seriously.
Name others0 -
rick_chasey said:
He wrote a book on how neoclassical economics is wrong so I doubt he's much of a subscriber to Friedman's views in general. He's arguing here that QE inflated house prices and left Britain over sensitive to rate rises, which doesn't really follow, as surely if everyone was less leveraged, the BoE would have raised rates more aggressively to account for the same necessary pain to curb inflation?TheBigBean said:
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.
It’s maps like this that make me not buy into his argument.
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I guess this depends on how you define credibility:surrey_commuter said:
name other, more credible, economic commentatorswallace_and_gromit said:
Name other what?surrey_commuter said:
Yes.wallace_and_gromit said:
Even with the nonsense he spouted about relative sizes of economies? That was painful to read.surrey_commuter said:
LOL - he was right about Brexit and remains one of the most high profile and credible voices on macro economics.Stevo_666 said:
Agree, he has lost a lot of fredibility after his Germany vs UK growth claim, which was a major piece of Eurobollox. Also it is clear that he is not objective or neutral.wallace_and_gromit said:
IIRC Carney got a serious shoeing in various quarters for his claim that the German economy was now 25% larger relatively than the UK’s post-Brexit. There were some quite heavyweight pro-remain economists involved in the shoeing as there were some very contentious, cherry-picked assumptions involved involving exchange rates. He’s been very quiet about this since the GBP exchange rates have recovered since the depths of the truss era, where he conveniently picked his end point.rick_chasey said:He got quite some heat for saying that on here last time I believe.
His general pre-referendum pessimism is warranted, but as with some on the remain side, he has overplayed his hand somewhat. I’m only one data point, but despite being pro-Carney from his BoE days and very sympathetic to his side of the Brexit argument, I no longer take him seriously.
Name others
Option 1 = average credibility of all your public pronouncements
Option 2 = lowest level of credibility achieved by a particular public pronouncement
With my risk management hat on, I'm generally more concerned with option 2 type scenarios. You and Rick seem more "Option 1" types, which is fair enough.
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On this, if his argument that QE has risen house prices too highly, then surely we’d be seeing a significant fall in house prices?TheBigBean said:
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.0 -
The night is young, as the saying goes.rick_chasey said:
On this, if his argument that QE has risen house prices too highly, then surely we’d be seeing a significant fall in house prices?TheBigBean said:
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.
Would we need QT ie the sale of gilts bought to reverse the impact of QE? At the moment, neither QE nor QT is happening from which price stability could be expected, all other things equal. (All other things are definitely not equal now though given interest rate moves.)
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Do they affect U.K. house prices particularly? The vast majority are bought by U.K. residents financed by a mortgage from a U.K. bank. And are other central banks doing any more QT than the BoE?rick_chasey said:(There are other central banks)
Share prices etc. would be much more affected by QE elsewhere as overseas buyers are much more common.
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Do they affect U.K. house prices particularly? The vast majority are bought by U.K. residents financed by a mortgage from a U.K. bank. And are other central banks doing any more QT than the BoE?rick_chasey said:(There are other central banks)
Share prices etc. would be much more affected by QE elsewhere as overseas buyers are much more common.
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The residential property market takes a while to adjust, but ultimately rental yields need to be sensible or prices will change. Why accept a 2% yield on a rental if you can earn double with cash in an account?rick_chasey said:
On this, if his argument that QE has risen house prices too highly, then surely we’d be seeing a significant fall in house prices?TheBigBean said:
He is subscribing to Friedman's view that inflation is a monetary policy issue, so trade barriers do not cause inflation.rick_chasey said:
He is not a fan of conventional economics entirely. So he'll be at odds with pretty much every central banker in the world, apart from the Turks and Argentinians, obviously.TheBigBean said:Criticism of Carney's view here. I think the author is not a fan of the expansionary monetary policy that Carney followed.
https://unherd.com/thepost/no-mark-carney-brexit-didnt-cause-inflation/
Also, the criticism here is pretty weak.
Carney’s case is so vague that it is difficult to discern. He acknowledges that we are experiencing the biggest energy shock since the 1970s due to the war in Ukraine, but he asserts that Brexit has triggered a “unique” adjustment for the country. How has it done this? What is the mechanism? Carney does not say.
That's because the format is not an economic journal or a policy level discussion. It's someone who was once the BoE governor and now runs ESG at Brookfield, the Canadian Real Estate investment behemoth, in an interview with a newspaper.
And anyway, if we subscribe to the neoclassical economics that this writer has written a book on saying is rubbish, than the mechanism is extremely clear.
Higher trade friction with the main trading partner reduces aggregate supply, and so all other things being equal, you have higher prices for the same output; aka inflation.
I think his main point though is that if Carney really believed his Brexit inflation views in 2018, then he should have done something about it.0 -
Sorry, I'll explain myself better.wallace_and_gromit said:
Do they affect U.K. house prices particularly? The vast majority are bought by U.K. residents financed by a mortgage from a U.K. bank. And are other central banks doing any more QT than the BoE?rick_chasey said:(There are other central banks)
Share prices etc. would be much more affected by QE elsewhere as overseas buyers are much more common.
House prices across the western world went absolutely stratospheric during covid and they have not really come down from that.
Across the western world they engaged in low interest rates and QE, right? Fed, ECB, BoE, Bank of Australia, the lot.
Now, some of them, to varying degrees, got into QT. Most of that is paused now, but they all did that.
In the meantime, rates across the western world have shot up. Everywhere, right?
UK is no outlier there; it's problems are relatively worse (Brexit, anyone?) but on a macro level they're on the same trend line.
So you've got rates *a lot* higher than they were across the western world, no more QE, some QT. Now, normally, that would shake out into lower house prices, right?
2008 we saw a big house price crash. Yet house prices across the west are broadly flat.
Aus, widely considered to be the most overheated property market, has seen it shrink about 7% (an order of magnitude lower than we saw in 2007/8), US is roughly flat, with some areas still growing heavily, UK is roughly flat, Netherlands still seeing property prices rise etc etc.
I propose that if low interest rates were the main reason behind high house prices, then the corollary would be that higher rates would then reduce house prices.
That hasn't happened.
So, back to the unherd article BB mentioned, he puts the blame of the current crisis on house prices that are too high, because of a policy of low interest rates and QE, so the rate rises that are happening now are too painful (rather missing the point that the pain is necessary to stop the pain of inflation, but anyway). So I contend, if this were to be right, we would surely see wholesale falling of house prices across the western world?
And indeed, some have argued here that house prices are not a supply shortage issue and instead are a monetary/demand issue > which again, if it were right, surely we’d be seeing a pretty hefty house price fall across the western world?
The economist today on a podcast had a stat that in Australia for every 100,000 immigrants who arrive, house prices rise by a percentage point, which would suggest it is indeed a supply issue (and they were suggesting this was one of the reasons prices are not falling) but since I can’t find a pithy tweet from a respected commentator I guess it doesn’t count here.
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Yet.rick_chasey said:
...
I propose that if low interest rates were the main reason behind high house prices, then the corollary would be that higher rates would then reduce house prices.
That hasn't happened.
...
These things move at a glacial pace as more people are affected. I'm assuming the majority of mortgage owners are still on their low rates but people will be reluctant to move and remortgage. It's coming...The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
They really didn't in 07/08....pblakeney said:
Yet.rick_chasey said:
...
I propose that if low interest rates were the main reason behind high house prices, then the corollary would be that higher rates would then reduce house prices.
That hasn't happened.
...
These things move at a glacial pace as more people are affected. I'm assuming the majority of mortgage owners are still on their low rates but people will be reluctant to move and remortgage. It's coming...
Here are the % moves...
Jan 2007 10.49%
Feb 2007 10.63%
Mar 2007 10.59%
Apr 2007 10.42%
May 2007 10.64%
Jun 2007 10.80%
Jul 2007 10.60%
Aug 2007 10.32%
Sep 2007 10.01%
Oct 2007 9.12%
Nov 2007 8.50%
Dec 2007 7.00%
Jan 2008 5.11%
Feb 2008 3.91%
Mar 2008 2.36%
Apr 2008 0.50%
May 2008 -0.03%
Jun 2008 -2.42%
Jul 2008 -4.69%
Aug 2008 -7.22%
Sep 2008 -9.67%
Oct 2008 -11.29%
Nov 2008 -13.74%
Dec 2008 -14.93%
Jan 2009 -15.37%
Feb 2009 -15.62%
Mar 2009 -15.53%
Apr 2009 -14.90%
May 2009 -14.25%
Jun 2009 -12.25%
Jul 2009 -9.69%
Aug 2009 -6.85%
Sep 2009 -3.70%
Oct 2009 -1.04%
Nov 20090 -
Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.0
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Yeah, so it took two years to go from peak to trough. That was my point.rick_chasey said:
They really didn't in 07/08....pblakeney said:
Yet.rick_chasey said:
...
I propose that if low interest rates were the main reason behind high house prices, then the corollary would be that higher rates would then reduce house prices.
That hasn't happened.
...
These things move at a glacial pace as more people are affected. I'm assuming the majority of mortgage owners are still on their low rates but people will be reluctant to move and remortgage. It's coming...
...The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Another factor is that after the GFC there was a massive hit to GDP (-7% in 2008/09 financial year I think) which is a factor not present this time, so far at least.pblakeney said:
Yeah, so it took two years to go from peak to trough. That was my point.rick_chasey said:
They really didn't in 07/08....pblakeney said:
Yet.rick_chasey said:
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I propose that if low interest rates were the main reason behind high house prices, then the corollary would be that higher rates would then reduce house prices.
That hasn't happened.
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These things move at a glacial pace as more people are affected. I'm assuming the majority of mortgage owners are still on their low rates but people will be reluctant to move and remortgage. It's coming...
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And as others have said, house price movements are a longer term game.
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Rates have been moving up for a year now. How long do you want to wait?
It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.0 -
There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.rick_chasey said:Rates have been moving up for a year now. How long do you want to wait?
It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.
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Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.
If a year is too soon, when isn't?
I mean, the GFC housing price dip only lasted what, 18 months?0
