Since Q1 2009, UK house prices have risen from £149,709 to £270,452 (Q2 2022) – an 81% increase. yet, during that period, median average wages have grown by just over 5%. The two main reasons are limited supply and ultra-low interest rates. Yet, this summer marked a turning point, with higher inflation causing Central …
There is no doubt that as the economy emerged from Covid lockdowns in 2021, the world experienced a surge in inflation, not seen since the 1970s. There are many supply and demand factors, which have caused this unexpectedly high inflation. The first factor is that Covid lockdowns, especially in China and Asia, disrupted global supply …
In recent months, the Pound Sterling has fallen against the dollar to levels not seen since 1985. This reflects long-term concerns about the UK economy, Brexit, the winter energy crisis and concerns about an imminent recession. The pound has fallen 16% this year, and the last month was the worst since 2016. The Pound is …
A recent report by the Bank of England made for grim reading. UK Output is forecast to fall and inflation is predicted to rise to a level not seen since the early 1980s. The UK like many economies is facing short-term pressures – rising energy prices, supply shortages and slowing growth. But, the malaise of …
When I started teaching economics in the early 2000s, I remember quite a few commentators predicting imminent house price falls because house prices were overvalued by historical trends, I used to occasional dip into house price crash forums to see a debate about when prices would fall. Yet, since 2000, even accounting for the financial …
Recently I wrote about impact of rising bond yields on long term bonds. There is uncertainty whether the rise in bond yields reflects economic growth or worries over government debt. This post explains the inverse relationship between bond yields and bond prices Bond Yield Curve Definition: The bond yield curve reflects the yield on government …
22 June 2016 If the UK vote to leave the EU, many predict the Pound will fall significantly. Investor George Soros predicted it could be a bigger fall than in 1992 ERM crisis. Soros claims the Pound could fall by up to 20% (BBC) There are different reasons why the Pound may fall. Uncertainty. Leaving …
Readers Question: Does rising interest rates always result in a fall in house prices? No. It doesn’t always cause a fall in house prices. But, looking at historical data, when there is a sustained and significant rise in interest rates, it is very likely house prices will fall. For example, the 1981 and 1991 house …