With qe and Greece hogging the headlines it might be worth mentioning an event that is going to affect boi's earning potential in the short term. Very soon the CB here is going to announce the new mortgage lending guidelines. If as expected they go for a 80...85% deposit and 3 x earnings it will have a big effect on the banks earning capacity for the next while. The vast majority of potential new house buyers just won't be able to buy a house, especially in the major urban centres. Its also likely to cap house prices so no big jump in the HPI for 2015 with a slow down in write backs the nett result. It's probably going to be a triple whammy for bank earning potential as house building as a business will also suffer. It won't effect the March results for FY2014 but boi could struggle to beat them in 2015.
There is an up side of course. First, these new rules if they can avoid falling victm to political policy in the run up to the general election here will undoubtedly lead to a safer banking system down the road. Secondly, they will slow house price inflation and after saving young couples might actually be able to afford a house that won't drain them of income. Thirdly, mortgage repayments will be lower in the future giving families some extra spending money in the real economy. Fourthly, it might force the banks to look to sme's, businesses and other areas as more acceptable customers in the future and not shun them as they do now. All in all , after some initial pain this will be good for the long term security of boi.
Tankboy, I liken our little BKIR like a semi-renegade schoolchild. It breaks ranks when all others rise, but falls into line when they fall. When no one is watching, and no news is good news, it does its thing in the background and surprises us all.
John, you are, of course quite right. Syriza is determined to stay in Europe. They may well succeed if they do not get an outright majority. The problem is that if in a club you have to obey the rules. Effectively Merckel is in charge and what she says goes. Torquay, a splendid post. The supermarkets are another form of dictator. They are managing to bankrupt the milk industry. In Italy milk is €1.12 a litre and we are happy to pay it. Only one item in the shopping basket. Last week chickens had been over bought and we got one 1.4 kilos for €2.5. And unlike the UK it tasted of something. Usually however twice that price. In the UK I get indigestion but here all the food is seasonal, few preservatives etc. I still do not know whether to keep these shares. I agree with the point that qe will only be up to €50 billion per month if it happens hopefully as suggested open ended. I am not convinced it has been a good thing I us or UK as it is artificial and has unfortunate side effects. Why do not the conservatives do away with zero hour contracts now? In France and Italy they must reform the labour markets but they won't or can't. At least Germany did. Many french businesses have located to Ashford about 160 the last I heard. My daughter is about to set up a little business. She needs a simple licence from the council, pay class 2 in- easy and quick to arrange. Advise HMRC and off she goes. In Italy the permissions neede are crazy and they take for ever to obtain. Meanwhile every mp has an official car. They are paid for life even if they lose their seat and there are 1000 of them. Bonkers.
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