From: "Tumbleweed" 
Newsgroups: uk.politics.misc uk.finance
Subject: Re: Bank warns of "collapsing house price nightmare" in UK
Date: Fri, 13 May 2005 18:07:57 +0100


 wrote in message 
news:1116002658.870551.319450@g43g2000cwa.googlegroups.com...
> Richard Faulkner wrote:
>> I read it as preventing a slowdown in the economy as a whole, rather
>> than just a house price crash.
>
> How will it do that? The 'economic growth' of the last few years has
> come from vast borrowing... at some point people simply can't justify
> borrowing any more, and interest rates won't make any difference.
>
> Again, look at Japan. Cutting interest rates to _ZERO_ made such a big
> difference there, didn't it?
>
>> Firstly - How was the pound when rates were 3.75%?? I dont remember
>> anyone squealing about it a 18 months ago, or so?
>
> It was around 1.4 to the dollar, which was insanely low. Also, oil has
> about doubled in that time, we've only been spared much of that
> inflation because the dollar has sunk against the pound... the last
> thing we need is higher oil prices.
>

Oil prices in this country are determined far more by tax rates than the 
cost of oil.
Also, as engineering output has fallen, the impact that increasing oil 
prices have on the economy diminish.

-- 
Tumbleweed

email replies not necessary but to contact use;
tumbleweednews at hotmail dot com