Mudball
Assistant Pro
For those look for financial indicators ..
https://www.newstatesman.com/busine...l-markets-may-have-just-predicted-a-recession
https://www.newstatesman.com/busine...l-markets-may-have-just-predicted-a-recession
Where is the world/UK (economy) headed
- Thread starter Mudball
- Start date
Newtonuti
Active member
I was lucky enough to be in the RAF during the 2008 crash so I wasn't massively affected. This time however I'm a lot more worried. We were lucky enough to re-mortgage just before interest rates rose though so hopefully by the time we're onto a tracker rate it's all settled down. USA are attempting to stabilise Crude prices by releasing barrels daily, and hopefully going to dish out some gas!
Voyager EMH
Slipper Wearing Plucker of Pheasants
Where is the world/UK (economy) headed
No need to mention personal circumstances then.
The world economic trends and the UK's place in that will continue on the same path that has existed for sometime.
Asian economies are on the rise and the relative positions of American and European economies will appear to fall accordingly. Though standard of living may increase for all.
South Korea, for example, has already overtaken the UK in terms of average earnings and life expectancy. A young adult in South Korea has far greater life prospects than one in the UK.
Difficult to grasp or accept for many UK residents as we seem to think it is our birth-right to sit at the top table of the world.
The future world economy will be Asian (4 billion people and rising) with Europe (1 billion people, stable) and North and South America combined (1 billion people, stable) playing a relatively less significant role. African economies could rise and their population could double to 2 billion over the next 40 years to have a far greater influence on world trade. African population increase will depend on a continuing trend of fewer births per adult female. Further reading is required if you find that concept contradictory.
If China, Japan and South Korea (and maybe a few others) organise themselves into an economic union similar to the EU this will greatly strengthen their world economic dominance.
The benefits of EU membership will be far greater in the future as European economies will need that trading strength to hold their place against Asian economies.
The UK economy's relative place against the rest of the world will not be affected very much by internal political changes or squabbles.
EU membership, or not, will make a huge difference one way or another over the next 35 years or so.
Another in/out referendum in 10 years time MIGHT be a good idea. If it is a good economic bus, why not get on it? Time will tell.
No need to mention personal circumstances then.
The world economic trends and the UK's place in that will continue on the same path that has existed for sometime.
Asian economies are on the rise and the relative positions of American and European economies will appear to fall accordingly. Though standard of living may increase for all.
South Korea, for example, has already overtaken the UK in terms of average earnings and life expectancy. A young adult in South Korea has far greater life prospects than one in the UK.
Difficult to grasp or accept for many UK residents as we seem to think it is our birth-right to sit at the top table of the world.
The future world economy will be Asian (4 billion people and rising) with Europe (1 billion people, stable) and North and South America combined (1 billion people, stable) playing a relatively less significant role. African economies could rise and their population could double to 2 billion over the next 40 years to have a far greater influence on world trade. African population increase will depend on a continuing trend of fewer births per adult female. Further reading is required if you find that concept contradictory.
If China, Japan and South Korea (and maybe a few others) organise themselves into an economic union similar to the EU this will greatly strengthen their world economic dominance.
The benefits of EU membership will be far greater in the future as European economies will need that trading strength to hold their place against Asian economies.
The UK economy's relative place against the rest of the world will not be affected very much by internal political changes or squabbles.
EU membership, or not, will make a huge difference one way or another over the next 35 years or so.
Another in/out referendum in 10 years time MIGHT be a good idea. If it is a good economic bus, why not get on it? Time will tell.
D-S
Well-known member
I foresee house prices having their long overdue correction in the next year or so.
Mudball
Assistant Pro
some valid points here. Just to add another behemoth >> India.
India is already bigger than the UK in GDP terms. This is another thing most people in the UK cant get their head around. I had an interesting conversation with a friend about India buying Russian Oil and therefore we should hold back on Indian aid. The UK aid to India is a drop in the ocean. We can stop it any day. However, most people forget that 'aid' is less to with money but more with wanting to retain political clout.
Broadly, I tend to agree the rise of Asia. Given the historical enmity, it is unlikely to see a tie up between India and China. But they will get other countries to form alliances. If it happens, a Russia-China-India alliance will be a very different new world order - Rouble- Yuan-Rupee will pivot the financial world in a different direction. This will be esp true given the size of the consumer base. If the world is able to wean itself off fossil fuels then the need for petro-dollars will be another blow to the west.
Is it? In the home counties, it seems to be still trending up.
D-S
Well-known member
Is it? In the home counties, it seems to be still trending up.[/QUOTE]
House price rises have dramatically outstripped wage growth for the past 15 years. With the era of low interest rates coming to an end, coupled with massive cost of living increases something has to give, just as it did with previous crashes/corrections - interest rate hikes and cost of living increases have not truly bitten yet so current rises in the Home Counties are (I foresee) likely to be short term and reversed.
We have a whole generation of house buyers who have seen nothing but low interest rates and inexorable price rises - those who bought houses in the 80's and 90's have seen different market moves and many experienced negative equity. I fear we might see a return to those days.
House price rises have dramatically outstripped wage growth for the past 15 years. With the era of low interest rates coming to an end, coupled with massive cost of living increases something has to give, just as it did with previous crashes/corrections - interest rate hikes and cost of living increases have not truly bitten yet so current rises in the Home Counties are (I foresee) likely to be short term and reversed.
We have a whole generation of house buyers who have seen nothing but low interest rates and inexorable price rises - those who bought houses in the 80's and 90's have seen different market moves and many experienced negative equity. I fear we might see a return to those days.
Mudball
Assistant Pro
House price rises have dramatically outstripped wage growth for the past 15 years. With the era of low interest rates coming to an end, coupled with massive cost of living increases something has to give, just as it did with previous crashes/corrections - interest rate hikes and cost of living increases have not truly bitten yet so current rises in the Home Counties are (I foresee) likely to be short term and reversed.
We have a whole generation of house buyers who have seen nothing but low interest rates and inexorable price rises - those who bought houses in the 80's and 90's have seen different market moves and many experienced negative equity. I fear we might see a return to those days.[/QUOTE]
i agree with it to an extend. This will be true particularly Outside of the core desireable/catchment areas this will be true. Unfortunately, 2 other factors will come to play here...
1) Demand continues to outstrip supply on this island. we cant grow more land and we want to save our greenbelts, so there will be a lot of demand pressure.
2) Where people cant afford houses, we will see a rise in high density living esp in the commuter belts. Our town centre has been ripped out and replaced with three new 20+ storey high rises. They have given permission for 5 new buildings incl some 30+ storey. As a commuter town, this is inevitable. Soon we will be 'greater london'.
3) On the supply side, when those on cheap mortgages cant afford it, there will be pressure on Govt/BoE to ease lending terms. We will return to 100% mortgages (and another financial crash sometime in this decade
) 4) We had the whole remote working led boom to country side, but i am starting to see more Cos asking people to return. With £5k+ train tickets, probably cheaper to rent a weekly bedsit in London (driving up prices) than commute
Springveldt
Well-known member
I've been hearing this for nearly 20 years now. The whole economy runs on house prices, it's what we do best, sell overpriced houses to each other.
They can't let them crash without bringing down the whole economy. Plus, MP's get a 2nd house for free so it's in their interest to keep prices up.
Mudball
Assistant Pro
https://www.newstatesman.com/business/2022/04/britain-has-fallen-out-of-love-with-its-housing-market
if you cant get past the paywall, then this thread has all the juicy bits
PNWokingham
Journeyman Pro
Not sure who the "they" is? But presume you mean UK Gov? They have a limited impact on house prices. The main drivers are incomes, interest rates, demand, GDP growth and outlook. I have been expecting a downturn for some time with the key to this being rising interest rates. My expectations were always too pessimistic and kept getting the big picture wrong as rates stayed a lot lower for longer - with the covid crash taking them to new lows. But this has changed over recent months, We have to look to the US as the lead on this area. YTD 2 and 3Y Treasury yields have risen ariund 1.7% in 3 months to around 2.6%. This is the most dramatic move in several years. 10Y yield have risen less, at 0.9%, and are now 2.4%. This indicates an inverted 2-10 yield curve, which is a big warning sign of recession. And this against a backdrop of soaring inflation and universal expectations of several interest rate hikes in the US and UK over the next 2 years. Governement core rates drive mortgage rates and will lead to much higher borrowing costs. This will dent the affordabilty of mortgages and banks will lower the amounts they will lend. Thus a backdrop of rapidly rising rates and the biggest reduction in free cash for households due to high single-digit inflation will inevitably lead to falling house prices from the current all-time-high levels. As to how far and how fast, that is hard to predict, but i now feel very confident that we have seen the peak and prices will only go down from here. Similarly and related, the risk of recession and staglation is very real over the coming 2 years. The global economy is now in a very precarious place and the longer the Ukraine invasion carries on the worse the backdrop will become
Mudball
Assistant Pro
From the New Statement article here >> https://www.newstatesman.com/business/2022/04/britain-has-fallen-out-of-love-with-its-housing-market
Similarly, 44 per cent of Conservative voters (and 51 per cent overall) would support a rise in council tax for owners of homes above the national average house price, and a decrease for those with homes that are lower.
I know a few retired neighbours who have lived in the house they bought for 50k about 30+ years ago and are now considered in the top 2-3 council bands and way above the national average. Their kids cant afford housing and now live with them and looking forward to an inheritance.
They dont have new sources of income and are not cash rich. I can see such proposals going down well with them.
Similarly, 44 per cent of Conservative voters (and 51 per cent overall) would support a rise in council tax for owners of homes above the national average house price, and a decrease for those with homes that are lower.
I know a few retired neighbours who have lived in the house they bought for 50k about 30+ years ago and are now considered in the top 2-3 council bands and way above the national average. Their kids cant afford housing and now live with them and looking forward to an inheritance.
They dont have new sources of income and are not cash rich. I can see such proposals going down well with them.
Springveldt
Well-known member
Maybe you are right this time, it's well overdue. I was one of the idiots who took a fixed rate out in 2008 as the only way I could see out of the mess was to raise interest rates and instead they turned on the printers and prolonged everything. I actually wanted to sell our house and rent for a couple of years as I expected prices to crash back then. Even now, there is still too much money sloshing around (only us plebs at the bottom never see it), just look at the stock markets all higher than 2008 even after covid. It just makes no sense, I used to think common sense would eventually win through but now I'm not so sure.
My company announce a few weeks ago that they thought their share price was too low so the board sanctioned a 1 billion dollar buy back scheme. This is the same company that gave out a 2% pay increase last year. If house prices fall, the rich will buy them up as there is plenty of money available and even more people will be left renting imho.
I truly hope I'm completely wrong. I'm in a position where house prices falling shouldn't affect me but it will make a massive difference to my daughter when she needs to buy one. Currently prices are completely wrong and I live in a cheap part of the country.
stefanovic
Medal Winner
Making predictions about the future is not easy.
You may have a 10% chance of getting it right or 'sorta' right, then you'll be able to say "Told you so."
You may have a 10% chance of getting it right or 'sorta' right, then you'll be able to say "Told you so."
Foxholer
Blackballed
On the contrary, it's very easy! And all sorts of idiots feel they must - on all sorts of topics!
stefanovic
Medal Winner
List of US presidents who used astrology to help them predict the future.
These Are the Presidents Who Believed in Astrology (and How Donald Trump Compares) (cheatsheet.com)
These Are the Presidents Who Believed in Astrology (and How Donald Trump Compares) (cheatsheet.com)
phillarrow
Well-known member
List of professional footballers who have died their hair blonde.
https://www.90min.com/posts/3511676...-outrageously-dyed-their-hair-blonde-recently
