Quotes from BofA Merrill Lynch Global Research:
- Prime London real estate has doubled since 2006, tripled since the 2000 and quadrupled since the last great Asia/EM crisis of 1998. And yet the Bank of England’s policy rate is at its lowest level in 300 years.
- In our view, London property is an extreme outcome of the Maximum Liquidity- Minimal Growth backdrop in the past seven years. The deflation of wages has, via central bank liquidity, been a primary driver of asset price inflation.
- We continue to rate the risk that excess liquidity ends in excess valuations and “speculative fervor” as high. And if excess liquidity is ultimately to lead to more generalized inflation and a sell- off in bond markets, we think the UK is likely to prove a very useful early warning system.
Published: 2014-03-27 16:42:00 UTC+00
High Risk That Excess Liquidity in Uk Ends in Excess Valuations and "speculative Fervor"
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