International Property News

04

The Bank of England's monetary policy committee today cut interest rates by a full percentage point to just 2% - the lowest for 57 years and the joint lowest in history, as a deepening downturn and still-stalled credit markets prompted central banks across Europe to look for ways to boost their economies.

The cut was widely expected after a run of awful data from every part of the economy this week which suggested that Britain is tipping into a long and deep recession that could last a lot longer than Alistair Darling predicted in last week's pre-budget report.
The BOE cut its bank lending rate from 3 percent to 2 percent, a reduction that follows an even larger 1.5 percentage point reduction that the United Kingdom's central bank made last month.  TUC General Secretary Brendan Barber said: "This decision was spot on. The Bank of England could not be clearer about what it expects the high street banks to do.
 
"The government must now pull every lever of influence to get banks lending. If that doesn't work, radical measures will be needed straight away. The alternative is a wave of bankruptcy and redundancy."
 
In a news release, the bank' s monetary policy committee said that the aggressive interest rate cuts were needed because steps taken so far have not reopened credit markets or done enough to support economic growth. The MPC said it was worried about stalling business investment and consumer spending as well as falling house prices. It added in a statement that the economic outlook remained poor and credit markets essentially frozen. It also said there remained a "substantial risk" of undershooting its 2% inflation target over the next couple of years.
 
Earlier today the Halifax reported that house prices had fallen by 2.6% last month from October, the biggest drop since September 1992 and one which took prices down a record 16% on a year earlier. Other news showed car sales had collapsed by 37% year-on-year.
 
Business surveys have weakened further and suggest that the downturn has gathered pace," the statement said. "Despite the actions taken to raise bank capital, ease funding and improve liquidity, conditions in money and credit markets remain extremely difficult." It added that "it was unlikely that a normal volume of lending would be restored without further measures."
 
The rate cut announced in London is expected to be followed by a similar announcement today out off Brussels following a meeting of the European Central Bank's interest rate committee. The ECB serves as the central bank for the 15 nations that use the euro as a common currency.
 
Then last month the Bank cut by 1.5 points - the biggest cut it has ever made - to 3%, the lowest since 1955. In contrast to other European nations, the United Kingdom has acted faster and more aggressively in responding to the global financial crisis, engineering takeovers of troubled banks and financial institutions and instituting programs to try to dampen the effect of rising mortgage defaults.
 
And today's cut means rates have not been so low since late 1951, when they were raised to 2.5% from 2%. Prior to that they had been at 2% for 19 years bar a blip upwards for a couple of months as war broke out in 1939.
 
Many economists argue that the lowest rates for decades are needed given that the world economy is potentially facing its biggest downturn since the Great Depression of the 1930s. This week a succession of surveys on the manufacturing, construction and service sectors that make up the bulk of the economy all hit record lows, as did mortgage lending.
 
Economists said the surveys indicated that GDP would contract by 1% in the fourth quarter of the year which, added to the third quarter's fall of 0.5%, would confirm the economy was in recession, one which most expect to last at least through the first half of 2009 and possibly considerably longer.
 
Pressure for a cut had been growing all week. The British Chambers of Commerce and Engineering Employers Association had both appealed for a full percentage point off rates while John Hawksworth, head of macroeconomics at PricewaterhouseCoopers had urged the nine-member MPC to cut by 1.5 points to 1.5%.
 
Borrowers on standard variable rates (SVR) are also unlikely to see today's full reduction passed on to them. Last month a number of the major lenders were quick to reduce their SVR by the full 1.5 per cent after coming under pressure from the Government, but most lenders are not expected to pass on this week's cut in full.
However, Lloyds TSB, which also lends under the Cheltenham & Gloucester brand, has already pledged to pass on any base rate reduction to its SVR borrowers in full.
 
But with oil prices having fallen more than $100 a barrel since the summer and economies everywhere stalling, the danger of deflation is now more real than the risk of inflation.
Actions: E-mail | Permalink |

Post Rating

Property News

Greece's finance minister resigned on Monday due to ill health, throwing the government's drive to soften the terms of an international bailout into confusion less than a week after it took office. With the win of right wing leader of New Democracy Antonis Samaras, it is assured that Greece has made it to the Eurozone.

The recent World Bank report suggests developing nations to get prepared for a tough economic scene which is about to appear in near future. Fearing the financial crisis to spread to bigger regions such as Italy and Spain...

Spain warns euro can be finished in months – without banking and fiscal policies. The EU summit in Brussels should assure markets that euro is to be safe-guarded against all odds. As recent reports suggest, Spain was looking out for an immediate bailout of funds from the euro-zone.

t looks as my wishes came true as in the last minutes Countries agreed a deal today to push for a new climate treaty, salvaging the latest round of United Nations climate talks from the brink of collapse. After more than two weeks of intense talks, some 190 countries agreed to four main elements.

More good news for home owners with Europe as The European Central Bank has cut interest rates back to their historic low of 1%, as expected by markets. UK interest rates have been held at a record low of 0.5% by the Bank of England's Monetary Policy Committee.

Global housing markets under pressure and other than a few pickets of resistance in Uk and other traditionally strong markets, the world's housing markets were on balance weaker during the year ending in the second quarter of 2011

Dubai Property owners are facing legal limbo as developers prematurely withdraw their maintenance services in anticipation of owners taking over the building’s upkeep, a property lawyer said. Property "Owner associations" (OA) waiting for registration have been left unable to pay bills

The Eurozone crisis appears to have pushed more European tenants into the central London rental market since the beginning of the year, with European tenants taking 30.4% of all new lets between January to May 2011 compared to 25% during the same period in 2010. By Knight Frank

Property markets in the UK may be reaching a turning point, according to the latest property analysis snapshot from real estate consultants Colliers International. The phrases ‘risk curves’ and ‘quality secondary’ are increasingly heard in informal conversation suggesting that movement may be imminent, it says.

Western Canada has the reputation of being one of the most beautiful places in the world, and Whistler, where all our holidays depart, has won the reputation as North America’s finest resort (as rated by Snow Country Magazine for the past six years).

Services
web

Application Development

app

Blockchain

CMS

Advanced CMS