Investment Comment: Investing in a low interest climate August 13, 2013 THE BANK of England’s decision to link interest rates to unemployment was widely expected. Accordingly, interest rates could remain at all-time lows until at least the middle of 2016. So what does this mean for investors? WINNERS AND LOSERS Savers will be the worst hit by the pledge of three more years of low interest [...]
What forward guidance means for mortgages August 13, 2013 LAST week, the Bank of England pledged to keep interest rates at 0.5 per cent at least until unemployment falls below 7 per cent – a threshold it expects to be met in mid-2016. Assuming the Bank sticks to the promise, and there a host of caveats in the announcement, this is good news for [...]
The Bank’s low interest rates will block our path to sustainable recovery August 12, 2013 THE Bank of England wants to secure sustainable growth and reduce unemployment by promising to keep rates near zero for three more years. Its new “forward guidance” commits to maintain rates at current emergency levels, even in the face of economic growth and above-target inflation. The success of this strategy depends on encouraging more lending [...]
Buy-to-let loans surge to 5-year high in fresh boom August 8, 2013 LENDING to buy-to-let landlords has soared to its highest level in nearly five years thanks to strong tenant demand and increased mortgage availability. Lenders advanced 40,000 mortgages worth £5.1bn in the three months to the end of June, up 21 per cent in value on the previous quarter and the highest since 2008, according to [...]
City Moves for 9 August 2013 | Who’s switching jobs August 8, 2013 Clayton Euro Risk The risk management company has announced the appointment of Konstantine Pastras as client development and strategy director. Pastras specialises in residential mortgage-backed securities. He has previously held various roles at DBRS Ratings, Fitch Ratings and Investec. Financial Conduct Authority The regulator has appointed four directors in its supervision division. William Amos was previously [...]
Estate agents: Help to Buy is boosting prices August 7, 2013 THE GOVERNMENT’S flagship scheme to stimulate the housing market is pushing up prices, estate agents warned yesterday, despite new Bank of England governor Mark Carney playing down the risk of a housing bubble. Homes in the Greater London area will shoot up by 6.9 per cent in value this year, according to Cluttons, while annualised [...]
Carney move sparks clash of opinions August 7, 2013 THE BUSINESS GROUPS JOHN CRIDLANDCONFEDERATION OF BRITISH INDUSTRY“This is a pro-growth statement with an important eye to inflation risks. Businesses will be buoyed by the support it should give to the economic recovery and be reassured by the built-in conditions around inflation and financial stability.” GRAEME LEACHINSTITUTE OF DIRECTORS“We are very concerned at the use [...]
Mark Carney’s promise of prolonged low interest rates risks being broken August 7, 2013 THERE is a wind of change blowing through the Bank of England with new governor Mark Carney at the helm. Under his two predecessors – Eddie George and Mervyn King – the Monetary Policy Committee (MPC) was always very reluctant to make commitments about its future policy. The view was that the Committee would reassess [...]
Bad news for Labour: Voters are getting behind coalition’s cuts August 6, 2013 ED BALLS and the Labour party have a big problem. The British economy is recovering, despite the coalition’s relatively modest cuts, and the public is increasingly supportive of reducing public spending. This is a devastating blow for Labour’s entire narrative, which was predicated on the view that “cutting too far and too fast” would not [...]
Help to Buy unlikely to spur new house building August 6, 2013 THE PRICE of housing is being driven upward by the government’s Help to Buy policy, but may not stimulate new building, according to ratings agency Fitch. Though the intention of the scheme is to get more people a place on the housing ladder, Fitch expects that chancellor George Osborne’s mortgage guarantees will mostly push up [...]