The perfect storm is brewing for UK inflation. Boris Johnson and his government will not admit it, but their choice of a hard Brexit will exacerbate price rises, on top of the effects of the Covid-19 pandemic.
This could put the Bank of England in the unenviable position of having to choose which bubble to burst: consumer prices, or house prices.
While all eyes are on Italy, the world’s second-largest economy is showing signs of trouble. China, this curious mix of communism and capitalism, is running out of steam – and ideas. Unless the Chinese government finds new ways to stimulate its economy, it might find itself facing the world’s biggest revolution.
The financial repression that central banks started after the global financial crisis of 2007-2009 does not seem to be close to an end. The central banks argue that inflation has not come back to their target of around 2%, but their definition of inflation is flawed.
Ahead of the Chancellor’s Budget set to be published on March 16, there is a lot of speculation that he may announce other measures to cool down the buy-to-let property market. I don’t think he will need to: the market will cool down pretty rapidly once the regulatory changes that are coming for banks are understood by buyers. Admittedly, that will take a while. This article is for those who want to stay ahead of the game.
Central banks’ credibility has been eroding bit by bit for a while now, but the first evidence that the public’s expectations about inflation are disconnecting from those of the policymakers emerged on Thursday.
Home sales in the US will continue rising at a healthy pace, as home prices are finally expected to increase, rather than decrease, analysts at Societe Generale said.
Under a scenario that assumes a rise in the yield on 10-year Treasuries – a benchmark for other interest rates – to 3.75 percent by the end of next year and to 5 percent by the end of 2017, they forecast that existing home sales will increase by 11 percent over the next two years and new home sales by 45 percent over the next three years.