The Full English Accompaniment – How now BoE cow?

What’s piqued my interest this week?

Due to life events there was no Full English Accompaniment last week, so a double length post this weekend to make up it.

As a millennial (oh how I hate that term) I sit squarely in a morass of people struggling with affording housing. Last weeks latest proposition of giving millenials £10k sits squarely in the ‘baby-boomer guilt complex’ zone that seems to occupy a lot of print inches currently. The economic logic behind it also seems to expect that all millenials want to save for the future, set up companies or buy property, and not, as the BBC voxpop (hack-spit) found, spend it all in Selfridge’s. Just who the hell are the BBC asking?

Either way, as millenials we’re not supposed to have any money, and we can’t afford to buy property. MrsFIREShrink and I are an exception to the rule. The Guardian this week reported that the proportion of home owners has halved for the millennial generation (1). Again I’m not really sure blaming millenials inability to save or avoid smashed avocado is fair. We’re certainly lucky to earn good wages, but a decade of sluggish economic growth, poor employment figures (if you discount the gig economy) combined with sky high house prices seems more at fault. People seem to be earning less, paying more rent and can’t afford to buy (2).

The economic factors don’t look like changing anytime soon. Business investment is poor, growth is weak, and investors nervous (3). Surely a great time to be buying up underpriced or underperforming investments. Especially since the UK output data first hinted, then led to, the Bank of England base rate sticking at 0.5% (4,5,6).

Great news for those with tracker/ SVR mortgages! Not so much for cash investments. There’s the obvious inflation effects of keeping the BoE base rate the same, but what about on house prices? Is the BoE surreptitiously stimulating a faltering flatlining housing market? Various sources have published this week that in areas house prices are falling (7). While it doesn’t feel like a full-on crash, could it be a herald of a new recession? A family friend who works in the city was a year ago suggesting just such a situation could be on the cards. He said “the market follows trends”, mysteriously and without any further guidance, before flopping in his cups.

Personally, following many years of turmult and the unexpected baby bundle of Brexit joy, I wonder if the current status may be a new norm. A norm of a flat housing market, flat base rates, sluggish growth and nervous confidence. A quiet while the world catches up after 20 years of financial storm and rebalances the employment market. Who bloody knows!?

Have a great weekend,


Side orders:

  • Baidu raises billions for an AI powered investment arm (8)
  • TSB does a good lame duck impression with it’s IT failures, but offers strong interest rates as apologies (9)
  • House of Fraser is the next head on the block, circling the drain by slumping to a loss and closing stores (10,11)

What I’m reading:

N.B. I’ve written a post this week about mortgages, but WordPress deleted it somehow, so that’ll follow next week.



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