Friday, July 08, 2005
Interest rates held in face of rising concern
The Bank of England ignored the terrorist attacks yesterday and held interest rates steady at 4.75pc for the 11th straight month, despite a slump in retail sales and mounting signs of an economic downturn.
The decision set off a storm of criticism from business groups and economic think tanks.
The Confederation of British Industry said the bank had missed the chance to shore up sliding confidence as gloom spread through the housing market and consumers held back on spending.
"While the economic situation is not desperate, it is clear that manufacturing is teetering on the verge of recession, the retail sector is under considerable pressure and the housing market is stagnant," it said.
The National Institute of Economic and Social Research said rates "should now be reduced", releasing fresh survey data showing the British economy grew by just 0.3pc in the three months to June.
Two members of the Bank of England's monetary policy committee voted for a cut at the June meeting, including the chief economist Charles Bean.
But a 9pc fall in sterling against the dollar and Chinese yuan since mid-May has changed the picture dramatically, giving British industry a major shot in the arm and boosting UK company profits from operations in America. The inflationary outlook may no longer be quite so benign.
There were signs yesterday that the British property market may at last be stabilising after a grim patch since the boom peaked last year.
The Halifax survey said house prices edged up 0.1pc in June, bringing the average price to £162,605. But the annual rate of growth has fallen to 3.7pc, the slowest in four years.
Martin Ellis, Halifax chief economist, said the market had been underpinned by rising loan approvals for five months in a row. "The economic fundamentals underpinning the housing market are sound. Earnings growth is robust. The UK economy continues to grow with the number in employment at a record high, and mortgage payments are very close to their long-time historical average," he said.
Prices continued to slide in Greater London (-1.1pc), the South East (-1.2pc), and East Anglia (-1.6pc), but the overall index was boosted by robust figures from Wales (+4.6pc), and Northern Ireland (+3.5pc).
The Halifax survey does little to clear the murky picture on British property.
Hometrack, which relies on data from agreed sales rather than mortgage approvals, said prices had fallen 3.6pc over the last year.
Rightmove.com warned recently that it could take seven years of "static prices and wage inflation" for the British property market to burn off the excesses of the past boom.
Halifax said earnings growth of 4.6pc was outstripping annual house prices for the first time since early 2001 and will soon push the ratio of prices to incomes below 5.5.
The North-South gap in prices has narrowed a further £10,000 over the last year as the slowdown bites deeper in London and the Home Counties.
The decision set off a storm of criticism from business groups and economic think tanks.
The Confederation of British Industry said the bank had missed the chance to shore up sliding confidence as gloom spread through the housing market and consumers held back on spending.
"While the economic situation is not desperate, it is clear that manufacturing is teetering on the verge of recession, the retail sector is under considerable pressure and the housing market is stagnant," it said.
The National Institute of Economic and Social Research said rates "should now be reduced", releasing fresh survey data showing the British economy grew by just 0.3pc in the three months to June.
Two members of the Bank of England's monetary policy committee voted for a cut at the June meeting, including the chief economist Charles Bean.
But a 9pc fall in sterling against the dollar and Chinese yuan since mid-May has changed the picture dramatically, giving British industry a major shot in the arm and boosting UK company profits from operations in America. The inflationary outlook may no longer be quite so benign.
There were signs yesterday that the British property market may at last be stabilising after a grim patch since the boom peaked last year.
The Halifax survey said house prices edged up 0.1pc in June, bringing the average price to £162,605. But the annual rate of growth has fallen to 3.7pc, the slowest in four years.
Martin Ellis, Halifax chief economist, said the market had been underpinned by rising loan approvals for five months in a row. "The economic fundamentals underpinning the housing market are sound. Earnings growth is robust. The UK economy continues to grow with the number in employment at a record high, and mortgage payments are very close to their long-time historical average," he said.
Prices continued to slide in Greater London (-1.1pc), the South East (-1.2pc), and East Anglia (-1.6pc), but the overall index was boosted by robust figures from Wales (+4.6pc), and Northern Ireland (+3.5pc).
The Halifax survey does little to clear the murky picture on British property.
Hometrack, which relies on data from agreed sales rather than mortgage approvals, said prices had fallen 3.6pc over the last year.
Rightmove.com warned recently that it could take seven years of "static prices and wage inflation" for the British property market to burn off the excesses of the past boom.
Halifax said earnings growth of 4.6pc was outstripping annual house prices for the first time since early 2001 and will soon push the ratio of prices to incomes below 5.5.
The North-South gap in prices has narrowed a further £10,000 over the last year as the slowdown bites deeper in London and the Home Counties.
# posted by Dr Search- Principal Consultant at the Search Clinic @ 9:53 AM 0 comments
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Wednesday, July 06, 2005
0 per cent mortgage rate for divorcees
Plenty of credit cards offer interest-free deals but a 0% mortgage?
One of Britain's biggest building societies is today launching just that - a home loan where borrowers pay nothing at all for six months.
In fact, Yorkshire Building Society will pay people £400 in the form of cashback to take out the mortgage.
Fresh Start is aimed at people who have recently divorced or separated, though the deal is available to all borrowers.
The Yorkshire said there were no other mortgages that offered people the chance to pay nothing to start with.
The society, which has 131 branches, said that, following research among recently-separated individuals, it had designed two mortgages - a fixed-rate deal and one that tracks the base rate - which would meet many of people's needs when they were in the process of dividing one home into two.
Both deals have an initial six-month interest-free period. If a borrower took the deal on a repayment basis, they would pay off some of the capital, but if they went for the interest-only version they would pay nothing for six months. There is a £395 completion fee but this can be added to the loan. It also allows people to borrow up to 100% of the property's value and offers access to a free counselling service.
Rachel Court, head of mortgages at the society, said: "We have spent a long time researching and developing our Fresh Start products, which primarily help people finance a new home, but also provide access to independent professionals who can provide expert advice to help deal with the wider aspects of a break-up."
Statistics show that the average marriage lasts 11 years, and 10% of couples split before their first anniversary.
One of Britain's biggest building societies is today launching just that - a home loan where borrowers pay nothing at all for six months.
In fact, Yorkshire Building Society will pay people £400 in the form of cashback to take out the mortgage.
Fresh Start is aimed at people who have recently divorced or separated, though the deal is available to all borrowers.
The Yorkshire said there were no other mortgages that offered people the chance to pay nothing to start with.
The society, which has 131 branches, said that, following research among recently-separated individuals, it had designed two mortgages - a fixed-rate deal and one that tracks the base rate - which would meet many of people's needs when they were in the process of dividing one home into two.
Both deals have an initial six-month interest-free period. If a borrower took the deal on a repayment basis, they would pay off some of the capital, but if they went for the interest-only version they would pay nothing for six months. There is a £395 completion fee but this can be added to the loan. It also allows people to borrow up to 100% of the property's value and offers access to a free counselling service.
Rachel Court, head of mortgages at the society, said: "We have spent a long time researching and developing our Fresh Start products, which primarily help people finance a new home, but also provide access to independent professionals who can provide expert advice to help deal with the wider aspects of a break-up."
Statistics show that the average marriage lasts 11 years, and 10% of couples split before their first anniversary.
# posted by Dr Search- Principal Consultant at the Search Clinic @ 9:49 AM 0 comments
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Monday, July 04, 2005
Hong Kong base rate raised to 4.75 pct from 4.5 pct
Hong Kong's interest rate base rate was raised on Friday to 4.75 pct from 4.5 pct after US Fed hike
The Hong Kong Monetary Authority said it has raised the base rate for its discount window by a quarter percentage point to 4.75 pct, effective from Saturday, after the US Federal Reserve Board increased its interest rates last week by 25 basis points.
The base rate is the reference rate for the lending of overnight funds to local banks through its discount window. The HKMA generally follows the Fed's interest rate adjustments as Hong Kong's currency is pegged to the US dollar.
The Hong Kong Monetary Authority said it has raised the base rate for its discount window by a quarter percentage point to 4.75 pct, effective from Saturday, after the US Federal Reserve Board increased its interest rates last week by 25 basis points.
The base rate is the reference rate for the lending of overnight funds to local banks through its discount window. The HKMA generally follows the Fed's interest rate adjustments as Hong Kong's currency is pegged to the US dollar.
# posted by Dr Search- Principal Consultant at the Search Clinic @ 9:56 AM 0 comments
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