Member Info for Savage_KeyboardR

Similar to Stupmy, it's not gone low enough for me to go for a top up. Keeping my eye on some other shares out there which are closer to my buy in price points at the moment.

I'll give them a look, cheers for sharing. Always good to hear an array of views out there and I think this recession may well be one of those where doom-mongers wail many times over... then it hits, just at the very moment they've all gone quiet from 'crying wolf far too many times'.

Personally I am watching the bond markets like a hawk, 2yr has inverted for the time being...

I'm watching out for when the 5yr follows in behind it (higher yield rate than 2yr) and I'll be taking that as the cue it's going to pop (with the caveat that the bond yield curves may periodically right themselves from time to time in direct reaction to various levers being pulled to kick the can down the road).

Completely agree with all that you're saying Stupmy... the issue is they'll delay pulling the necessary levers and delay some more... Everything possible will be done to prop up the indebted, and especially the housing market, meaning it'll only implode once there are no more levers left to pull, there's probably another 6 months yet to go and maybe some more than that.

I disagree, despite strong words I think UK Gov will continue to allow inflation to run fairly hot. Yes, rates have risen significantly over last 14months but they'll lose the bottle to inflict the punishing rates required to meaningfully bring inflation back to 2% target. Far more likely to see rates peak around 6% max and stay there for a rather prolonged period. Raising them above 6% will be political suicide, everything including the kitchen sink will be thrown at protecting the housing sector from implosion.

Thanks for sharing the info about Jet2 numbers, useful to know!

Tough language on rises appears to have cut through, a proportion have immediately responded with discretionary spending cuts which could prove an important factor for the Aug rate decision? Could this end up delaying the peak of the base rate by a month or two? As some making deep cuts right now (Jun-Jul) may feel as though they have plenty more cash in their pockets than they expected through Aug-Dec? If there's just a 0.25% rate rise in Aug this could be one of the strongest boom periods for Travel in very a long time?

Cruise operator Carnival just recorded record quarter for bookings:

https://www.lse.co.uk/rns/CCL/carnival-corporation-2q-2023-earnings-ytwwnubb2rd31u1.html

Agree with you to an extent Stille. However... many older mortgage free folk + some landlords can crack on booking up their Tui cruises & beach holidays as bank rate rises have next to zero impact on them (landlords just raise the rents). Many of them can even get a little more return from their savings accounts now and recent 10.1% state pension rises have limited their exposure to inflation (all respectively compared to younger working and middle classes). This economic turbulence is a golden time for some and those who can will splash out.

Yup, almost... I was going to but TUI had not hit my buy threshold, so I bought something else instead.

0.5% was always going to be the right call after those CPI inflation results, running far too hot. I thought the BoE didn't have it in them... guess they've learnt from their past slow start. Puts homeowners/renters + anyone needing finance/refinancing in a tricky situation.

Share your BoE forecast here if you like - Reluctantly I am going with 0.25%

In my opinion even a .5% BoE rate hike will not be enough to tame inflation this hot. I'm reckoning Sp will increase, as revenues continue to pour into many firms selling goods & services, incl TUI. Board made a good call to undertake the RI and clear down a good chunk of debt ahead of the peak in rates.

I'm not so sure the heavy sells mean they expect 0.5% - I say this as 0.5% would tame inflation, support £ and finally inject much needed confidence into UK PLC economic management. I think the gilt sales are signalling total lack of confidence in UK Gov and BoE ability to grab the bull by its horns. In my opinion it's not simply a recognition of rising bank rates.

I completely agree with your 'act now to avoid pain later' but they've not been doing that for a long time, will they suddenly start to do so? I don't think so as homeowners and BTL holders will squeal.

Heavy selling on the gilt markets this morning suggests traders think BoE does not have the stomach to raise by 0.5%.

I meant to add that only a bold 0.5% rate rise will now hold back share prices from rising in my opinion. Key Q... does BoE have the stomach to ramp up rates that sharply? Given it may trigger repossessions and makes it difficult for start ups and businesses with large debts and small incomes too.

CPI figs out prove inflation far hotter than forecasts... could well prove good for share prices as inflation drives increases in revenues relatively to size of company debts.

I should have quoted my source:

https://www.kantar.com/uki/inspiration/fmcg/2023-wp-uk-grocery-inflation-falls-but-shoppers-still-feeling-the-pressure

Fraser McKevitt, head of retail and consumer insight at Kantar, said:

“This is the lowest rate of grocery price inflation we’ve seen in 2023, which will be a relief to shoppers and retailers. But prices rising at 16.5% isn’t something to celebrate and it’s still the sixth highest monthly figure in the past 15 years. Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone.”

Grocery inflation drops to 16.5% - a fall from the 17.2% recorded a month ago, and below the record 17.5% recorded in March...

This is far more stubbornly high than forecast (I thought it'd be above forecast but even my worst expectations have been beaten).

Could we be looking at a BoE 0.5% hike?

I should probably add... Should BoE holds rates investors may well consider that to be madness, could well trigger a deep gilt and £ sell off...

Agree, I'm thinking it looks more likely it will dip. Perhaps down to 530-550p - Should BoE raise rates by 0.5% the dip could be substantial but anything less is priced in. BoE holding rates looks the most unlikely outcome and would probably cause a sharp increase in sp.