Mortgage rates

I am glad to see the Telegraph today giving front page prominence to the rise in mortgage rates this week. See yesterday’s blog on interest rates and the MPC for the background.

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4 Comments

  1. Mountjoy
    Posted March 29, 2008 at 3:42 pm | Permalink

    I have just changed jobs, moving one part of the UK to another. Having managed to sell my home, I am now renting. I would quite like to return to the housing ladder, but the mess Labour has made of it makes it too risky for me at this point. The Bank of England is not helping with its Inflation vs Interest Rates attitude.

    Why, let's keep inflation (whether CPI or RPI) down, despite huge rises in bread and butter etc. RPI or not; it may be RIP for the British economy and housing market.

  2. Donitz
    Posted March 29, 2008 at 7:58 pm | Permalink

    In Economics devalued house prices are not such a bad thing.

    If you sell your house for less than its paper value was a year ago you feel, to put it mildly, annoyed.

    However, when you subsequently purchase your new house it too has also dropped in value. Its current price is also less than its paper value was a year ago. You feel you have driven a hard bargain and got yourself a great deal.

    Stamp Duty and Money Borrowed to fund the new purchase are both smaller than they would have been a year ago. The Agents Fees on the sale are also smaller than they would have been a year ago….

  3. Matthew Reynolds
    Posted March 29, 2008 at 11:17 pm | Permalink

    RPI is far more accurate as an inflation measure while HCPI takes no account of many commodities that are rising in price ! The MPC should be ordered to slash RPI-x to 2% within five years & then operate with a two year RPI-x inflation target after that of say 2% . Higher inflation is a bad thing – just look at the political reputations that have been shot to bits trying to defeat rampant price rises that often hit the least well – off . As we are not going to enter the Euro we do not need the bogus HCIP – let us stick to a correct inflation measure & policy suited to UK needs . By having an initial five year period for curbing RPI-x the Bank of England can respond to the credit crisis now if needed & can then get back to fighting inflation . The Bank of England must regain the powers it lost in 1997 while MPC members have fixed non renewable terms to limit uncertainty & bolster its independence so our central bank can take the right monetary action regardless of political meddling that has caused too much economic instability in the past . The tripartite set up is too cumbersome & inflexible as Northern Rock has proved – there where too many people who where unsure of their responsibilties and whose eyes where off the ball . We need a streamlined set up with a clear demarcation of who is in charge of what – rather than incompetence & buck passing . The Bank of England cannot help its flawed – but legally binding mandate that needs reform so that economic stability is brought about via a sound framework . Had public spending risen by 1% less than average GDP expansion over the last ten years with the money used to redeem debt ( and cut taxes in 2001 & 2005 just before the general elections and in 2007 to smooth the path toward Gordon Brown becoming PM ) then the UK would have learned from the Aussies & the Irish and we would have an economy in far better shape . If the national debt was far lower then taxes could have been slashed this year to offset the credit crunch induced problems hitting the UK . The kind of Growth Rule style policy that Eire have had has served them well – vast rises in public expenditure have not made our public services the best in the World while higher taxes have not produced the outcomes sought by the left and a big public debt is a tax on future generations caused by todays wasteful QUANGO state & welfare dependency . The UK needs a new economic policy as the evidence from the UK over the last decade shows what has failed and equally the Irish experience proves what has done really well .

  4. Matthew Reynolds
    Posted March 30, 2008 at 12:17 am | Permalink

    RPI is far more accurate as an inflation measure while HCPI takes no account of many commodities that are rising in price ! The MPC should be ordered to slash RPI-x to 2% within five years & then operate with a two year RPI-x inflation target after that of say 2% . Higher inflation is a bad thing – just look at the political reputations that have been shot to bits trying to defeat rampant price rises that often hit the least well – off . As we are not going to enter the Euro we do not need the bogus HCIP – let us stick to a correct inflation measure & policy suited to UK needs . By having an initial five year period for curbing RPI-x the Bank of England can respond to the credit crisis now if needed & can then get back to fighting inflation . The Bank of England must regain the powers it lost in 1997 while MPC members have fixed non renewable terms to limit uncertainty & bolster its independence so our central bank can take the right monetary action regardless of political meddling that has caused too much economic instability in the past . The tripartite set up is too cumbersome & inflexible as Northern Rock has proved – there where too many people who where unsure of their responsibilties and whose eyes where off the ball . We need a streamlined set up with a clear demarcation of who is in charge of what – rather than incompetence & buck passing . The Bank of England cannot help its flawed – but legally binding mandate that needs reform so that economic stability is brought about via a sound framework . Had public spending risen by 1% less than average GDP expansion over the last ten years with the money used to redeem debt ( and cut taxes in 2001 & 2005 just before the general elections and in 2007 to smooth the path toward Gordon Brown becoming PM ) then the UK would have learned from the Aussies & the Irish and we would have an economy in far better shape . If the national debt was far lower then taxes could have been slashed this year to offset the credit crunch induced problems hitting the UK . The kind of Growth Rule style policy that Eire have had has served them well – vast rises in public expenditure have not made our public services the best in the World while higher taxes have not produced the outcomes sought by the left and a big public debt is a tax on future generations caused by todays wasteful QUANGO state & welfare dependency . The UK needs a new economic policy as the evidence from the UK over the last decade shows what has failed and equally the Irish experience proves what has done really well .

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    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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