UK interest rates cut to 0.25%

[LeftishBrit]

UK interest rates have been cut from 0.5% to 0.25% - a record low and the first cut since 2009.

The Bank of England has also signalled that rates could go lower if the economy worsens....


The Bank also announced the biggest cut to its growth forecasts since it started making them in 1993.

It has reduced its growth prediction for 2017 from the 2.3% it was expecting in May to 0.8%.

http://www.bbc.co.uk/news/business-36976528


What a mess. The interest rate reduction may help those with mortgages, but will be a disaster for those relying at all on savings, pensioners, etc. And the economy looks like being in freefall for a long while.

[BooScout]

2. Actually, no one has been making much off of savings for awhile now....

Even before the cut, no one was really making anything.

I think Carney knows his stuff. He kept Canada out of recession. If he is able to 'force' the banks to actually lend to get the housing market stimulated more then his policies may just work to some extent.

Because of Brexit, he's having to do a lot of maneuvering. Much of what is going to happen with our exit is going to be beyond his control. If we go into a recession, I hope all those who voted for Brexit are happy because they sure as hell dumped us all in it now.

[muriel_volestrangler]

3. I don't think the housing market needs any stimulation

House prices are 5.2% higher than a year ago: http://www.nationwide.co.uk/about/house-price-index/headlines

Here's the house price index, adjusted for inflation (against the RPI - ie if house prices went up at the same rate as others, it would be flat), with the long term trend, from http://www.nationwide.co.uk/about/house-price-index/download-data:



They're higher than any time except 2004-2008 - which was a bubble.

[BooScout]

4. Yes....but the banks aren't lending....

I also wonder what that graph would look like if London was taken out of it.

[muriel_volestrangler]

5. Without London, the 2016 price would be about 1.7 times the 1993 one

(as opposed to the 1.95 with London). If you left out their 'Outer Metropolitan ' area too, it would be about 1.6 times (I've produced weighted averages using the Nationwide's regional indices). Prices in all areas are now at a higher level, after allowing for inflation, than at the end of 2002.

If banks aren't lending to some people, that might indicate some good judgement - lending too much on properties at inflated prices, or to people who wouldn't be able to afford it in the long term, was a large part of what caused the previous bubble.

[BooScout]

6. Banks have been reluctant to lend to potential home buyers or small businesses....

...since the crash. The only times they have increased their lending is when the government has offered schemes and incentives to do so.....in other words, sweetened the pot for the banks.....you know, the idiots that helped create the crisis to begin with.

Housing prices may have increased, but wrapped up in Carney's rate cut is yet another scheme to encourage banks to lend. Another £100 billion to try and 'force' banks to lend. That won't help much in London though, as properties that once housed those on the lower rungs of the property ladder are forced out as the properties are snapped up by corporations interested in catering to the higher end of the ladder with increasing and alarming frequency.

[T_i_B]

8. One of the reasons I heard for voting "leave"...

.....was some people hoping it would cause a crash in the housing market so they could therefore be able to get on the housing ladder.

[Donald Ian Rankin]

9. That strikes me as a lot more rational than many of the other reasons I've heard. N.T.

[LeftishBrit]

7. UK labour market enters 'freefall' after Brexit vote, REC says

Britain's labour market entered "freefall" after the vote to leave the European Union, with the number of permanent jobs placed by recruitment firms last month falling at the fastest pace since May 2009, a survey showed on Friday.

The monthly report from the Recruitment and Employment Confederation (REC) showed starting salaries for permanent jobs rose in July at the slowest pace in more than three years.

Overall, the survey added to evidence that business confidence and activity slowed sharply after the June 23 vote to leave the European.

"The UK jobs market suffered a dramatic freefall in July, with permanent hiring dropping to levels not seen since the recession of 2009," said REC chief executive Kevin Green. "Economic turbulence following the vote to leave the EU is undoubtedly the root cause"


http://uk.mobile.reuters.com/article/idUKKCN10F2SL

[non sociopath skin]

10. The grimly amusing thing is that Brexiters talk about "getting over" Brexit ...

... and how the negative predictions about it haven't come true, seemingly oblivious to the fact that it hasn't actually happened yet ...

The Skin