BOE 3rd November Rate Announcement
Discussion
Scootersp said:
djc206 said:
Worry not our dear leaders have already thought of that. Through a variety of methods political classes across most democracies including our own have successfully disenfranchised the poor and the young so they don’t turnout.
and even if they do the 2 choices are largely the same? and/or that's one of the methods!You’re getting the same fundamental economic system, which is broken and subverted, whatever the colour of the monkeys ties.
OoopsVoss said:
But the medicine is working... CPI down to lowest level since 2021 and under expectation 3.4%. Jeremy Hunt says the medicine is working and inflation will be 2% soon (one assumes he hopes the Tories have lost the next election when base effects bump it up again).....
Hmmmmmm......
We could drop inflation quite a bit by dropping the energy price cap when no one is using much energy. Hmmmmmm......
Tim Cognito said:
Does anyone else think house prices haven't really cooled enough for interest rate cuts? Feels like if rates start coming down this year we will return to stronger than desirable/sustainable house price growth.
Events take a long time to play out. We have a culture now where everyone expects instant responses, even the market professionals react to the now rather than the tomorrow a lot of the time as seen with the whipsawing in lending rates over the last 6 months. Many people seem to currently be of the thought that because rates have stopped rising and inflation is pulling back that it is all over and we are back to normal but the rational thought is that we are more likely just in the usual hiatus after major changes and the true impacts haven't started to show yet as it's too soon.
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
The local towns appear to have shop vacancies growing. Footfall appears unchanged but even Ramerò's zombies headed to the mall out of habit.
Who knows but I'm not betting on this being the beginning of the end but more likely the end of the beginning.
DonkeyApple said:
Events take a long time to play out. We have a culture now where everyone expects instant responses, even the market professionals react to the now rather than the tomorrow a lot of the time as seen with the whipsawing in lending rates over the last 6 months.
Many people seem to currently be of the thought that because rates have stopped rising and inflation is pulling back that it is all over and we are back to normal but the rational thought is that we are more likely just in the usual hiatus after major changes and the true impacts haven't started to show yet as it's too soon.
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
The local towns appear to have shop vacancies growing. Footfall appears unchanged but even Ramerò's zombies headed to the mall out of habit.
Who knows but I'm not betting on this being the beginning of the end but more likely the end of the beginning.
I think you’re right. Our neighbours had their patio done two years ago by a chap who is highly thought of locally, they had to wait about 6 months. Friends of ours who live locally have just had him start a big garden job with a few weeks notice. If someone with that sort of rep is able to start that quickly I feel sorry for the guys just starting out. Similarly local decorators seem to be constantly advertising whereas even last year you couldn’t get one to show up for a couple of months and if they advertised it was invariably the odd day where they’d had a cancellation or delayed project.Many people seem to currently be of the thought that because rates have stopped rising and inflation is pulling back that it is all over and we are back to normal but the rational thought is that we are more likely just in the usual hiatus after major changes and the true impacts haven't started to show yet as it's too soon.
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
The local towns appear to have shop vacancies growing. Footfall appears unchanged but even Ramerò's zombies headed to the mall out of habit.
Who knows but I'm not betting on this being the beginning of the end but more likely the end of the beginning.
On the idea that they’ll slash prices soon we’re holding out to get our kitchen done. I’ve expressed an interest online with a few companies and when the emails start flooding in thick and fast we’ll move.
Small ticket stuff will always sell. People will always want their standard entertainment but the big ticket stuff is definitely where the signals are clear to see.
DonkeyApple said:
Events take a long time to play out. We have a culture now where everyone expects instant responses, even the market professionals react to the now rather than the tomorrow a lot of the time as seen with the whipsawing in lending rates over the last 6 months.
Many people seem to currently be of the thought that because rates have stopped rising and inflation is pulling back that it is all over and we are back to normal but the rational thought is that we are more likely just in the usual hiatus after major changes and the true impacts haven't started to show yet as it's too soon.
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
The local towns appear to have shop vacancies growing. Footfall appears unchanged but even Ramerò's zombies headed to the mall out of habit.
Who knows but I'm not betting on this being the beginning of the end but more likely the end of the beginning.
Is this just a return to pre COVID trades not the insanity we've had for the last 4 years? Maybe slightly on the quiet side but the weather's been so pap I think everyone is only just leaving winter mode. The trades are in for a quiet few years I think, mainly because about 8 years worth of home renovations have been condensed into 4.Many people seem to currently be of the thought that because rates have stopped rising and inflation is pulling back that it is all over and we are back to normal but the rational thought is that we are more likely just in the usual hiatus after major changes and the true impacts haven't started to show yet as it's too soon.
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
The local towns appear to have shop vacancies growing. Footfall appears unchanged but even Ramerò's zombies headed to the mall out of habit.
Who knows but I'm not betting on this being the beginning of the end but more likely the end of the beginning.
From a retail point of view across a wide range of sectors (e-commerce) we're looking to have a pretty good March and better than forecast.
OoopsVoss said:
And no surprises this AM when bank of Japan ended 8 years of negative rates.
Soldiers on the ground were sort of signalling about this. Their unionized workers rate is much lower than U.K. (around 16%?) though their large corporations have also been signalling pay*rises that would affect inflation. One of the downside risk could be their mortgage payments, nearly 70% has floating rates.DonkeyApple said:
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
Definitely quieter out there. I’m having some building work done and the lads are saying that they can get me as many people as I need. What’s more interesting is now busy the builder’s merchants are(n’t) and the way prices have come down on some products. I always have a look at their delivery board and it’s gone from waiting ages and product being in short supply to being able to get deliveries whenever you want them without restrictions on quantities.
LooneyTunes said:
DonkeyApple said:
Totally anecdotally, I have just had the decorators turn up last week after leaving the job with them on the basis that they give me notice when they're free. The carpet fitters are taking bookings for next week not the usual 1-2 months out. It's only taken me two days to find a joiner who is quoting sensibly and can start in 2 weeks and my builder is chasing me to start an extension project asap and I'm the one dragging my heels!! It's Spring, I'm in an affluent area and this is usually a bad time to be wanting trades as everyone else's projects are kicking off or have been booked in to start by now from last year yet there's suddenly no lead times for these trades and they're quoting normal prices. You can't exactly draw any sane conclusions but one might guess that business demand has eased somewhat.
Definitely quieter out there. I’m having some building work done and the lads are saying that they can get me as many people as I need. What’s more interesting is now busy the builder’s merchants are(n’t) and the way prices have come down on some products. I always have a look at their delivery board and it’s gone from waiting ages and product being in short supply to being able to get deliveries whenever you want them without restrictions on quantities.
Talking recently to other decorators and they’re the same, although when I go to the merchants they always appear very quiet.
Currently trying to get a plasterer for a customers house - have tried 8 so far and all are busy well into June.
Looking to have our drive re done and most of the companies I’ve enquired with are looking July / August to do anything.
I’m at that time in life that when the work stops coming in I’ll retire…
Scootersp said:
"This "basket of goods" is regularly updated to reflect shopping trends, with vinyl records and air fryers added in 2024, and hand sanitiser removed."
It's an interesting 'basket'
https://www.bbc.co.uk/news/business-68515100
You'd think it would focus on essentials wouldn't you, not things some will never buy, or buy once or twice a year?
It has to reflect what people purchase, otherwise it would have little relevance.It's an interesting 'basket'
https://www.bbc.co.uk/news/business-68515100
You'd think it would focus on essentials wouldn't you, not things some will never buy, or buy once or twice a year?
Also, how do you define an essential?
Are train fares essential if you use a car to get around? Is car fuel an essential if you use trains to get around?
Which foods are essential?
Is gas an essential, even though millions of homes only have electricity?
djc206 said:
Similarly local decorators seem to be constantly advertising whereas even last year you couldn’t get one to show up for a couple of months and if they advertised it was invariably the odd day where they’d had a cancellation or delayed project.
Wish I lived near you, having terrible trouble getting a decorator who can do a few rooms, so 3 or 4 weeks work.Out of 6 so far, only 2 quotes received and they can't start for several months.
I want to get the house on the market and this is pushing all my plans back.
At the stage now that I may do it myself.
Similarly flooring, spoke to a guy yesterday who said "if you had called a couple of months ago I was scratching around for work, now booked out for next 3 months"
LooneyTunes said:
Definitely quieter out there. I’m having some building work done and the lads are saying that they can get me as many people as I need.
What’s more interesting is now busy the builder’s merchants are(n’t) and the way prices have come down on some products. I always have a look at their delivery board and it’s gone from waiting ages and product being in short supply to being able to get deliveries whenever you want them without restrictions on quantities.
Lots of manufacturing over supply in Asia now and heavy deflation so materials coming in from those markets have fallen back quite a lot and the retailers look to now be beginning to pass some of this on. Labour definitely seems to be slackening and I've had two people drop their day rate. What’s more interesting is now busy the builder’s merchants are(n’t) and the way prices have come down on some products. I always have a look at their delivery board and it’s gone from waiting ages and product being in short supply to being able to get deliveries whenever you want them without restrictions on quantities.
So far we've had this 12/18 month period where everything has been fudged by employers paying more for staff and charging customers more for goods. Lots of people have seemingly taken the view that this is normal but I think if you're a little bit older you find yourself looking at the situation and thinking it is plain weird. How long can employers cover a rise in operational costs and a decline in transactions by paying workers more and charging customers more?
If anything this current hiatus looks to me like an even bigger potential damn burst? What exactly is going to happen when employers stop being able to put bid for labour and stop being able to increase prices to have customers cover it all and then get told by their lenders and the capital markets that they can't have any extra money to blow on this game? Surely that's when all these firms have no choice but to start murdering each other? Once they reach the point where there is not enough food to go around then they have to start picking the weakest and butchering it for its clients and cheaper staff?
All the big ticket stuff like extensions, renovations, cars etc do appear to be in a big shift. I'd love to know what's happening at kitchen companies as they're a real consumer and consumer debt bellwether.
Tim Cognito said:
Is this just a return to pre COVID trades not the insanity we've had for the last 4 years? Maybe slightly on the quiet side but the weather's been so pap I think everyone is only just leaving winter mode. The trades are in for a quiet few years I think, mainly because about 8 years worth of home renovations have been condensed into 4.
From a retail point of view across a wide range of sectors (e-commerce) we're looking to have a pretty good March and better than forecast.
Yup. Just don't know. Retail is seeing a real split based on what is being sold and to whom. Lots of retailers are quietly not replacing staff and in some chains you can really notice the head count drop. So you still see queues but realise they're synthesised. From a retail point of view across a wide range of sectors (e-commerce) we're looking to have a pretty good March and better than forecast.
The accounting and law firms look to be quietly dropping labour.
There does seem to be a shift occurring under the surface.
Russ T Bolt said:
djc206 said:
Similarly local decorators seem to be constantly advertising whereas even last year you couldn’t get one to show up for a couple of months and if they advertised it was invariably the odd day where they’d had a cancellation or delayed project.
Wish I lived near you, having terrible trouble getting a decorator who can do a few rooms, so 3 or 4 weeks work.Out of 6 so far, only 2 quotes received and they can't start for several months.
I want to get the house on the market and this is pushing all my plans back.
At the stage now that I may do it myself.
Similarly flooring, spoke to a guy yesterday who said "if you had called a couple of months ago I was scratching around for work, now booked out for next 3 months"
oyster said:
It has to reflect what people purchase, otherwise it would have little relevance.
Also, how do you define an essential?
Are train fares essential if you use a car to get around? Is car fuel an essential if you use trains to get around?
Which foods are essential?
Is gas an essential, even though millions of homes only have electricity?
They come under travel and energy that we all use different methods so taking the changes in them all makes sense to a measure.Also, how do you define an essential?
Are train fares essential if you use a car to get around? Is car fuel an essential if you use trains to get around?
Which foods are essential?
Is gas an essential, even though millions of homes only have electricity?
Re food I'd like to think they weight it more on the staples less on the caviar end, but I don't know.
Just seems to me that something very niche like Vinyl records doesn't make sense, has no real place, as it must be miniscule in comparison to the above?
djc206 said:
Maybe there’s been a bounce. Have peoples pay awards just kicked in for this year? 3-4 weeks sounds like a fairly substantial project not just a few rooms. I recently did a bathroom myself and it reminded why we started using a decorator in the first place.
Lounge, dining room and two of the bedrooms, the two quotes I have had so far estimated the same, 3 weeks, my expectation is that it will take longer, based on it always does when I get tradesmen in.DonkeyApple said:
If anything this current hiatus looks to me like an even bigger potential damn burst? What exactly is going to happen when employers stop being able to put bid for labour and stop being able to increase prices to have customers cover it all and then get told by their lenders and the capital markets that they can't have any extra money to blow on this game? Surely that's when all these firms have no choice but to start murdering each other? Once they reach the point where there is not enough food to go around then they have to start picking the weakest and butchering it for its clients and cheaper staff?
All the big ticket stuff like extensions, renovations, cars etc do appear to be in a big shift. I'd love to know what's happening at kitchen companies as they're a real consumer and consumer debt bellwether.
It's all subtle signs until it's not isn't it? You are never going to have all trades with no work and so it's trying to take in the anecdotal "I'm fully booked for next 3 mths" vs "I can find a guy for next week, when I never normally could" and trying to see what the overall balance/trend is.All the big ticket stuff like extensions, renovations, cars etc do appear to be in a big shift. I'd love to know what's happening at kitchen companies as they're a real consumer and consumer debt bellwether.
No one ever shouts (outside their close inner circle) about work/demand being poor, as it does little for their fortunes/often makes things worse, it's more the thing to talk things up even until the last?
I've talked about it before, I've seen first hand when a company can be very close to the wire and how only a tiny tiny percentage of the people knew and still know as this information never comes out if at all possible because it's potentially so damaging, it can make you the first one on the list to be murdered, you indicate weakness you can be buried and your business goes to A N Other that was in worse shape but were quiet about it and so survive, maybe even go on to thrive if they get some of your old good people!?
I'm trying to find a 2008 pre crisis quote where one of the major banks top staff, did the "it's fine nothing to see here" a week or so before total carnage.
This is why crashes are so severe? because (fair enough) everyone tries/fights to the last?
OoopsVoss said:
Don't think it will be 1 cut, but a series of them. These are NOT "emergency" cuts, there is sound theory called Neutral rate that suggests where rates should end up (its 1 - 1.5% above the inflation rate). At that rate the CB is neutral in the economy and the economy is doing its thing. The nasty thing is government indebtedness. Everywhere.
There is the somewhat inconvenient matter that many countries run up larger debts than historically possible due to ultra low rates (G7 debt to GDP average is about 128%). Countries and governments are going to need lower rates to service their debts, especially as the low rate stuff is maturing and needs to be rolled over.
Italy's numbers are the easiest to look at, Debt to GDP around 140%, with a 5%+ budget deficit (there are various ways to calculate deficit - the OECD has them at >7.2% for 2023 compared to the UK around 4.2%) The deficit should fall in 2024 - a tad (due to higher tax receipts) - but will start to grow again in 2025/6 as they have to refi at least 260billion of debt this year at much higher rates. Now this isn't saying Italy is going to fail, but is posing a big challenge domestically - where to find the savings and also to the EU because they will have to redo SGP accepting higher debt burdens / deficits. Everyone in the west is (largely) in the same boat - but there are legal wrappers around the Euro that will make the obviousness of high debt to GDP a thing AND the need for accommodative ECB policy (regardless its like Lord of the Flies in there at times). If those deficits increase, then Govts ARE going to get downgraded and that WILL spook markets. Italy is one notch above junk - if it hits junk - then a lot of bond holders can't, so less buyers (with a dump / firesale) = higher spreads = more deficit. The risks of higher rates are larger than getting them down to neutral rate bands.
The risk of declining rates is when / if they are burning through neutral rate. That means economies can't function without accommodative Central banks and you are looking like a zombie (or worse reliant upon monetary financing which is straight to hyper inflation hell).
Sorry Oops, I missed your post. I do feel the rate of the cuts will indicate the level of perceived risk and that we will be better off if that rate is slow. If the FED were to bang in a relatively rapid series of cuts then, to keep, this would suggest they were seeing a very significant default risk spike as businesses failed to rollover liabilities?There is the somewhat inconvenient matter that many countries run up larger debts than historically possible due to ultra low rates (G7 debt to GDP average is about 128%). Countries and governments are going to need lower rates to service their debts, especially as the low rate stuff is maturing and needs to be rolled over.
Italy's numbers are the easiest to look at, Debt to GDP around 140%, with a 5%+ budget deficit (there are various ways to calculate deficit - the OECD has them at >7.2% for 2023 compared to the UK around 4.2%) The deficit should fall in 2024 - a tad (due to higher tax receipts) - but will start to grow again in 2025/6 as they have to refi at least 260billion of debt this year at much higher rates. Now this isn't saying Italy is going to fail, but is posing a big challenge domestically - where to find the savings and also to the EU because they will have to redo SGP accepting higher debt burdens / deficits. Everyone in the west is (largely) in the same boat - but there are legal wrappers around the Euro that will make the obviousness of high debt to GDP a thing AND the need for accommodative ECB policy (regardless its like Lord of the Flies in there at times). If those deficits increase, then Govts ARE going to get downgraded and that WILL spook markets. Italy is one notch above junk - if it hits junk - then a lot of bond holders can't, so less buyers (with a dump / firesale) = higher spreads = more deficit. The risks of higher rates are larger than getting them down to neutral rate bands.
The risk of declining rates is when / if they are burning through neutral rate. That means economies can't function without accommodative Central banks and you are looking like a zombie (or worse reliant upon monetary financing which is straight to hyper inflation hell).
Scootersp said:
I'm trying to find a 2008 pre crisis quote where one of the major banks top staff, did the "it's fine nothing to see here" a week or so before total carnage.
This is why crashes are so severe? because (fair enough) everyone tries/fights to the last?
It might have been said by someone, but there were enough voices saying the "balloon is going to go up", that it wasn't a consensus view. The Big Short might have suggested that only 3 people saw this coming, but anyone sensible was already offloading the dogsThis is why crashes are so severe? because (fair enough) everyone tries/fights to the last?
t, getting paid more to sit on it or take bigger haircuts. Arguably that haircut ramping did Lehman in, once JPM started (and everyone else followed) upping the haircuts on loans to Lehman - they couldn't cover the margin calls so everyone called default.And that nearly took Stanley's and Goldman out - if they hadn't succumbed to the Fed on the weekend of the 19th Sept.
I'd guess that you won't see a global banking crash that threatens financial stability again. To big to fail is a thing - so anyone who presents a systemic risk is "saved" either bailed out or forced into subjugation Credit Suisse style. Anyone small is allowed to go. Where you might see a banking crisis is China, with CRE taking out a lot of their regional banking sector - but that's unlikely to cause much of an issue here.
The real problem, slow motion car crash is debt sustainability particularly sovereign. MrWhippy has some interesting and anecdotal thoughts on the issue, but the problem is bigger than anyone really wants to admit - hence the crash could be far, far worse than anyone imagines. Its not a 100% given that the lights go out (so forget about crypto), but the chances of complete system and social breakdown increase thousand fold. Its too big a risk, so they won't test it - the system WILL be maintained until the conditions are there for massive and long term (generational) fiscal reform.
I was at a JP Morgan event yesterday, and their Global Head of Research gave a very sobering macro overview. The UK view wasn't overly awful - mild recession / anaemic future growth - but the US numbers are scary. One thing that stood out, their Social Security Fund (so the vehicle that collects taxes / pays out benefits) is out of money within 10 years, Medicaid too. No social security or medical provision, can't happen so they will have to borrow YET more to fund it. The view that the US going to 170%+ debt to GDP over the next 20 odd years, is being accepted. They did say, that a US soft landing is about 50/50 versus boiling the frog, but the debt numbers are colossal. They also explained why a the US debt load is far worse than Japan's 225% debt to GDP due to structural differences.
Just spent the morning with a fund, doing an investment review.
This was something we discussed.
We shared the view that it is a curve, with various sectors of the economy at certain points.
Anything involving a capital purchase, such as car or home improvements, are getting back to normalised trade. Covid soaked up a lot of latent demand, so there is now a bit of a hangover.
The outlook for our real estate markets was positive, with at least 4x 25bps base rate reduction being priced into the next 12 months.
It means we get a bit of yield compression downstream, so a good time to sell, as you are pricing in a future.
This was something we discussed.
We shared the view that it is a curve, with various sectors of the economy at certain points.
Anything involving a capital purchase, such as car or home improvements, are getting back to normalised trade. Covid soaked up a lot of latent demand, so there is now a bit of a hangover.
The outlook for our real estate markets was positive, with at least 4x 25bps base rate reduction being priced into the next 12 months.
It means we get a bit of yield compression downstream, so a good time to sell, as you are pricing in a future.
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