The Halifax (the largest mortgage provider in the UK formerly part of HBOS and now a brand in the Lloyds Banking Group) have announced that according to their figures based on mortgages granted house prices rose 1.9% in January.
So that’s it then. End of the recession, we can all go back to buying consumer goods on equity release mortgages 😉 safe in the knowledge that all this talk of depression was just a bad dream.
(AGI) – Frankfurt, Feb. 5 – It cannot be excluded that the ECB will cut interest rates again in its next board meeting in March, said ECB president Jean-Claude Trichet in a press conference. He indicated that a 0.5pct cut is more likely than a 0.25pct decrease. ”We will see what we’ll do in the coming meeting, when we have new data and much more extra information” he added.
I’d go along with that. There is very little risk of inflation in the eurozone. The euro is too highly valued and some easing of rates to follow the US and UK is likely. The UK base rate just dropped to 50 basis points to 1%. The recent civil unrest in France and Greece was a lot to do with the value of the euro. Ireland’s Celtic Tiger economy is showing distinct similarities with the Sabre Toothed variety (ie extinct). Spain and Portugal’s tourist sectors are really being hurt by the euro. I think the Deutsche Bank results will encourage a cut and the only question in my mind is will it be more than 50 basis points.
The European Central Bank has given no real explanation as to why it is averse to pushing interest rates towards zero percent, one reason may be concerns that low interest rates will undermine incentives to holding longer-term deposits, potentially depriving banks of capital which could be used for lending.
There is a growing feeling in the markets that the European Central Bank would find it far more difficult than other central banks to provide a monetary stimulus through unconventional monetary measures once interest rates have fallen to, or near, zero percent.
While the European Central Bank’s Trichet has indicated that all policy options remain on the table, many analysts think the ECB would be entering a financial quagmire were it to start buying up toxic bank assets across the 16 member states.