The pr machine of the CIF and other VI’s really is working on a huge amount of people who are fully expecting the ECB to drop the base rate in the near future. I think a lot of us have heard comments from people about how Europe need to act soon and save the housing market. However as we here know it’s possible, or even likely, that the ECB will actually raise the rate in the coming months.
If/when that happens it’s really going to hit a lot of people hard psychologically. And as our government tend to be of a mind to find a scapegoat for ruining their glorious boom I believe they will encourage people to blame Europe for the housing crash. Rather than accept that it was always inevitable that an unsustainable boom should end in a crash and that the government should have controlled the boom.
So could we start to see a movement in the country to pull out of the Euro? Could returning to the punt be an issue in future elections? And how possible would it be and what consequences would it have for the country if it happened?
not a hope, there would be a run on the new punt like the run back in the early 90’s, interest rates would rocket (as said above) the ECB will not move to protect 1% of the EU economy, we have roughly same population as the greater manchester & liverpool areas combined, we’re a drop in the ocean and the VI’s need to accept that
Was reading the FT over the weekend and it was very doom and gloom regarding UK property. The striking thing was that there wasn’t one scrap of a “VI” making a fool of themselves saying everything’s gonna be alright. This VI lark seems to be an Irish thing – it’s a chance to get your name in the newspaper and to publicly demonstrate that you are aligning yourself with the landlord classes of Ireland.
I would believe that in the UK as they must have learned from their last property bubble that you can only fool all of the people some of the time and not as VIs believe here that we are tick loike dey are wha.
I agree. I would see an ECB rate of around 5-6% as a more typical rate.
What’s more, is that although two Euro countries that had a property bubble (Spain and Ireland…what are the other ones? Does anyone know?), that the vast majority of other Euro countries didn’t - notably Germany and toa lesser extent France (certain areas did though).
The DM was the second most common reserve currency after the US dollar, and thankfully the ECB seems to continue to not be the political bastard child that the BoE and FedReserve are. We would be screwed by our own government and the UK now if we had the punt.