Article(s) associated to this keyword
- Some Areas Still Fare Well For House Prices
- Chamber Of Commerce Calls For Rate Cut
- Inflation Below One Per Cent In 2009
- Recession Looms For Britain And Europe
- Bank Holds The Base Rate
- Bleak House Price Outlook
- House Prices Could Fall By 30%
- Economy Faces Big Challenge
- Housing Market Slides Again
- Banks To Bail Out B&B
Land Registry figures show that there are still some regions which have been performing well in the difficult property market, even in the last quarter. Some of the areas showing up well may come as a surprise.
In its latest economic forecast the British Chamber of Commerce has called for interest rates to be cut to help stave off recession. It reckons that recession is more of a threat than inflation. Interest rates, it says, should be cut when inflation has peaked - expected to be in the autumn.
It may seem unlikely now as inflation has just reached 4.4%, but leading economists are forecasting inflation of one per cent in 2009. This is because the current figures are influenced by rising oil prices, but next year they will be replaced by the now falling price of oil.
Both Britain and Europe are facing recession as Bank of England Governor and European economists warn of difficult times ahead. Projections are now for economies to shrink and many in the Euro zone are already doing so.
Despite, or perhaps because of, pressures of inflation and the threat of recession pulling interest rates in both directions, the Monetary Policy Committee decided to keep the base rate at 5% for August. The European Central Bank followed suit by holding its rate too.
Both Nationwide and HBOS have a bleak outlook for house prices in the next two years. More people are falling into mortgage arrears and recession remains a risk. Nevertheless HBOS see enough stability for the Bank of England’s MPC to keep interest rates relatively unchanged in 2008.
MPC member Professor David Blanchflower has forecast that house prices could fall by 30%. He also called for interest rates to be cut to head-off a recession. Meanwhile Halifax’s rights issue failed, but some mortgages are on their way down.
Inflation is rising; the stock market is falling; banks in the US are going under. Where should the Bank of England head next with the interest rate? There are some big challenges ahead for the Bank of England’s Monetary Policy Committee.
The monthly RICS survey reports housing market activity at its lowest rate since records began. Buyers either can’t or won’t buy, maybe waiting for prices to go even lower. However, the number of buyers registering with estate agents is showing a small increase.
Six of Britain’s biggest banks have agreed to assist B&B. Under pressure from the FSA they have agreed to ’sub-underwrite’ share purchases in the beleaguered bank. It is now highly unlikely that shareholders will take up the rights issue as shares in the bank are worth less than they are being offered for.
