Should target UK inflation include housing acquisition costs?

A major weakness of the official consumer prices index (CPI) is its omission of owner occupiers’ housing costs. The Office for National Statistics (ONS) publishes a companion measure, CPIH, incorporating such costs using the “rental equivalence” method, which imputes rents on owned homes based on those paid on similar properties in the rented sector. The […]

3 January 2015 by The Harried House Hunter

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Best laid plans – Good intentions need to be acted upon before they can lead to good returns

By Ian Kelly The old proverb holds that the road to hell is paved with good intentions and it would appear the road to poor investment returns may have a similar motif. According to a recent academic paper by US economics professor Danny Yagan, how people actually end up investing their money can diverge significantly […]

30 December 2014 by The Harried House Hunter

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Basic mistake – Why one lesson of ‘Finance 1.01’ is ‘Wrong. All wrong’

By Jamie Lowry Any student of finance or economics will recognise the chart below. It shows the graphical relationship between risk and return – the idea that, as investors take on more risk, they should be compensated with more return. The leap people tend to make from this is that, in order to earn greater […]

29 December 2014 by The Harried House Hunter

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UK GDP revisions dash MPC productivity optimism

UK GDP and services output figures released today suggest that the economy continues to grow robustly, contradicting widespread expectations of a second-half slowdown – see previous post. Downward revisions to earlier data, however, imply that productivity performance has been even weaker than thought, while indications of a rise in domestically-generated inflation have been confirmed. The […]

29 December 2014 by The Harried House Hunter

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But we haven't had sustained Deflation for decades!

The Government and the Bank of England (helped by the media) keep telling us Deflation is bad for us. Think about that. We don’t want lower business and living costs.  You really couldn’t make it up.  How surreal and Orwellian. They say we need inflation as otherwise people won’t buy stuff and the economy will […]

25 December 2014 by The Harried House Hunter

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Secure Trust Bank still setting the pace

Overall the last week has been fairly quiet for new account launches, as providers start to wind down for Christmas. There have been some interesting increases amongst fixed rate bonds in the last few days and whilst it is encouraging, it is too early to herald it as the start of an upward trend. The […]

22 December 2014 by The Harried House Hunter

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Fed 2015 / ECB 2011 comparison flawed

Paul Krugman recently drew a parallel between the Federal Reserve’s plans to raise interest rates in 2015 and the ECB’s ill-fated 2011 policy tightening, which was swiftly followed by a recession. The monetary context is different, however, casting serious doubt on the comparison. Former ECB President Jean-Claude Trichet bears the unfortunate distinction of having raised […]

22 December 2014 by The Harried House Hunter

Economy

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The generation game – Lowly valued, yes, but oil and gas businesses lack one key thing. Cash

By Kevin Murphy Regular visitors to The Value Perspective will be aware that one of our preferred metrics is something called the Graham & Dodd price/earnings (P/E) ratio. Rather than referring to a single year’s profit number, this longer-term P/E ratio uses an average of 10 years’ profits to try and smooth out the inevitable […]

22 December 2014 by The Harried House Hunter

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The three key themes for fixed interest in 2015

It’s currently a very volatile period for fixed income markets with severe weakness in high yield (HY) and emerging market (EM) sectors. Much of this weakness has been driven by the collapse in oil prices and the direct impact of that on cash-flow expectations for companies that have HY debt (mostly in the US) and […]

21 December 2014 by The Harried House Hunter

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Eurozone surveys firming on schedule

Eurozone business surveys are starting to confirm the improved economic outlook signalled by monetary trends and leading indicators – see previous post. The Eurozone manufacturing purchasing managers’ new orders index rose back above the breakeven 50 level in December after three months below it. This turnaround has occurred on schedule following a recovery in the […]

17 December 2014 by The Harried House Hunter

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