ECB Cut Interest Rates

Interest rates will stay low

Earlier this week, I said that interest rates look set to
stay low.

This week, the ECB announced that it is reducing interest
rates. Trump is demanding that the US federal reserve also cut interest rates
and the UK base rates stand at just .75%.

Other central banks are keeping rates low in order to
stimulate the flagging economy.

The ECB is also introducing other stimulus measures such as
pumping money into the economy by buying €2.8 billion worth of bonds.

As I said, this is good news for borrowers but not so good
for savers.

In the UK you can get mortgages at just over 1%, but in some
countries you can get mortgage is it close to zero or even negative rate
mortgages.

It should be a good time to fix your mortgage rate as there
is also a bit of a mortgage work going on with lenders falling over themselves
to attract customers.

The property market in the UK has been in the doldrums for
the last few years, with some areas such as London fallen sharply. The average
price rises in the rest of the country are barely moving.

However, with the conclusion of Brexit finally in sight and
‘no deal’ looking like it is off the table, some agents are reporting an
increase in buyer activity.

With Sterling still down at just over £1.20 against the
dollar, properties must look cheap for foreign buyers. The pound could also
benefit from the Brexit bounce once we come out of the EU. The pound reaches
the highest level since July

If you are an overseas investor looking to get into the UK
market I’m looking for a partner, let me know.

My personal view is that we have not seen the end of market
turbulence, so I’m holding back on investing in the stock market and will only
consider below market value shares and property.

Price of gold, silver and other precious metals has risen
sharply in the past year, indicating that some investors are nervous and are
looking for a safe haven.

I recently reported that the Chinese businessman Jack Ma
said that we should all be working 12 hours a day six days a week. In the UK,
some believe that we should push towards a 35 or four day working week.

This was introduced in France several years ago and has
caused problems for business.

There is an argument that working too many hours causes
fatigue and problems, but any top-down legislation trying to force a shorter
working week for businesses needs to be carefully considered. Businesses cannot
afford to just pay people the same salary for five days while working only
four, which would add an extra 20% to their bottom line.

Other news

The London stock exchange has rejected Hong Kong bid thank
goodness.

Word of the Day

Quantitative Easing

The short answer is Quantitative easing government central
banks printing money.

Putting more money back into the economy in order to
stimulate economic activity.

In practice, QE is a monetary policy whereby a central bank
buys predetermined amounts of government bonds or other financial assets in
order to inject liquidity directly into the economy.

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