Bank of England

RE: Neither do I think

Wrong move - reduce interest rates to get housing market moving? The reason it ain't moving is cause house prices are too high, needs action to bring the prices down not to inflate an already high inflation sector.
If people can't sell their house it's cause they are asking too much for it!

 

As opposed to

putting half the country in a negative equity position? bring back Norman Lamont.

 

But M1 my friend

that was always thatchers great want...you know a nation of home owners = a nation of borrowers

 

I've wrote 4 replies to this

And then deleted it and started again.

Each time I think, you'll not win any hearts minds or friends responding here.

I think I'll leave this one for another day.:0

Off home now.

 

Si thi later

 

i agree with eastander

the reason people cant sell their houses is because they are priced too high.

i want an house but i cant afford one. by reducing interest rates it doesnt mate that 100k house any more acheivable at all. all it does is encourages me to take on MORE debt. how can that be good?

 

RE: i agree with eastander

Don't worry about house prices increasing at a pace again - one small change in iterest rates does not have this effect - the same was seen in reverse 12-18 months ago - it took about 4 or 5 increases in rates before people got the message and stopped spending so fast.

The rate reduction is designed to ease the burden slightly on an economy that is in danger of going into recession.

If the country continues to worry collectively about their medium term ability to pay their existing debts then they stop buying further stuff - that means we don't need to make as much - that means people who make things lose their jobs - then they have no money at all, so they buy even less etc. That's what starts recessions.

It is a fine balancing act - of course you don't want to see house prices go up again sharply, but by the same token a recession is in no-ones interest.