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Mix-Ansicht- Housing bubble made in GB (ex DT, quotable) - dottore, 02.04.2004, 11:03
Housing bubble made in GB (ex DT, quotable)
-->Borrowing against properties goes through the roof
By Edmund Conway (Filed: 02/04/2004)
The prospect of a rise in interest rates next week heightened yesterday as Bank of England figures showed the public borrowed a record amount against the value of their homes last year.
(...)
The Bank said mortgage equity withdrawal (MEW) leapt by 20pc to £16.19 billion in the final quarter of 2003, well above most economists' predictions, taking the annual total to £53 billion.
It added that MEW as a percentage of private taxed income rose from 7pc to 8.3pc, the highest ever level, and well above those reached during the late 1980s boom.
Economists said the public had been coaxed by low interest rates and high house prices into releasing money from the value of their homes.
The revelation will strengthen the Bank's resolve to tighten rates further in coming months. In the minutes to its last meeting, the Bank warned that it could take only two years for wider debt-to-income ratios to reach the levels of the early 1990s - when they helped trigger a recession and house price crash.
Although the figures released yesterday did not reflect the interest rate rises in November and February, Simon Rubinsohn, economist at fund manager Gerrard, said he expected MEW levels to remain high throughout this year.
"For the whole of 2004, the level is likely to exceed £60 billion," he said.
The CIPS purchasing managers' index of manufacturing activity rose from 53.0 to 53.7 in March, as the sector continued to recover from three years of recession. Questions still remain, however, over whether this increase will be reflected in the Office for National Statistics' manufacturing output figures.
The new orders index rose from 53.2 to 55.1, but the input prices index also rose from 61.0 to 63.9. The employment index fell from 50.9 to 49.9 - below the 50 mark that divides expansion from contraction. Economists said this meant job numbers in the sector would continue to be pressed.
George Buckley, UK economist at Deutsche Bank, said:"Assuming next week's data does not soften, we see no reason for the Bank to wait for another month before raising rates.
"Nonetheless, this is unlikely to be a straightforward meeting for the Bank and the decision may well turn out to be closely contested."
Wie gut, dass es die Briten gibt, die können sogar aus Stein & Mörtel Geld machen - Think positive!
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