Monday, Jan 08, 2007
49 out of 50 economists say no IR rise in January
FT.com: Rise in rates this month unlikely, say economists
In a poll conducted by Reuters, only one out of fifty economists believe the Monetary Policy Commitee will raise interest rates above 5% when their meeting ends on Thursday. This conflicts with the financial markets view, which have already priced in a quater point increase.
Posted by jellycaster @ 10:48 AM (128 views) Add Comment
13 Comments
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1. Surfgatinho said...
Didn't realise the markets were pricing this in. I thought it was a done deal that they were pencilled in for Feb. I thought that was what the markets were expecting too?
2. tyrellcorporation said...
I don't see the point of waiting. The CPI jumped from 2.4% to 2.7% and there is no reason to think it won't jump to 3.0% at the next quarterly report. By which time, symbolically, disaster will strike and Mole, sorry Mervyn, will have to send a little letter to Grodon.
I reckon get a rise in early, shock the markets a little (like in August) and hope things start to cool down.
On a side note. I was in Nationwide yesterday and the loans waiting room was packed like a bank holiday departure lounge! Everyone looked slightly 'hunted' like they were waiting for the headmaster to call them in. I reckon record mortgage and lending figures again for the coming months...
3. Bomberbrown said...
I had some money left in my betfair.com account so I bet £3 @ 13.5 to 1 in favour of a .25% increase this Thursday. I know its a longshot, but I always like to back the outsider. If I win, it'll cover a meal out I guess. :)
4. sirgoogle said...
Well the 49 out of 50 are dead wrong. The markets are right.
Wage rises are topping 4% up from 3% a couple of months ago. See article posted below.
No excuses - put the IRs up
5. paul said...
This is why the MPC members should be summarily fired if CPI inflation overshoots 3%.
It's not as if inflation is taking them by surprise they just don't want to sacrifice the sacred housing market cow.
6. harold said...
...and 8 out of 10 owners said their cat prefered it.
7. Nohpc said...
Nobody wants increased rates apart from the people on this site. And it's not the interest of the country they are concerned about. The BoE is trying to keep rates as low as possible but they will raise them if necessary. However, they are aware that increasing rates will cause financial misery to many people in Britain who have indebted themselves up to the eyeballs. This is also very bad for the economy as people will stop spending money as they try and claw themselves out of debt. They are really in a damned if you do damned if you don't situation here and I don't think there is a right or wrong answer because either way we are headed for inflation or deflation but no perfect middle ground.
8. C'mon Correction said...
Nohpc - don't be a Moron.
Don't make posters on this website out to be doom-mongers who wish bad things on others. A lot of us are more intelligent than that.
UK Personal debt is closing in on 1.5 TRILLION pounds. Every 4 minutes we are getting £1 million more in debt 24 hrs 7 days a week.
Interest rates are TOO LOW, and have been for too long. Our long-term economy is in SEVERE danger. It is politicians and people like you that put their own interests ahead of the UK's LONG-TERM economy. Selfish self-serving people.
Wake-Up and stop believing the spin!!!!
9. talking rot said...
" ... many people in Britain who have indebted themselves up to the eyeballs."
Aren't these people ADULTS who should understand the consequences of their actions? Besides, most can take the IVA route, pay back a relatively small amount, and keep their home. Big deal.
"... because either way we are headed for inflation or deflation but no perfect middle ground."
No, the UK isn't. Try tell people in the early 1990s when inflation was 15% that by 2007 many ADULTS would be concerned about a 0.25% rise from 5% to 5.25%. They would have looked at you as if you had two heads.
I do not pretend to know what will happen with the economy but I no longer believe tales of impending economic doom. Stagnation, yes, but doom, errr no.
10. David20040_0 said...
They won't rise the Bank of England hasn't the bottle to do it, any slight sign of house price weakness and they don't dare.
11. tyrellcorporation said...
'Nobody wants increased rates apart from the people on this site'... NoHPC
...er, and the millions of people who have money in savings accounts and don't fire-hose borrowed money at stuff they don't need!
Get with it NoHPC, we're not all fiscally delinquent!
12. paul said...
NoHPC you're far too lenient on those MPC folk who do 12 days work a year for £130,000 each.
If they fail in their remit, are they responsible or accountable? No.
Damned if they do damned if they don't. HA - THATS LAUGHABLE. If they had managed the inflation / interest rate cycle properly when they were glibly ignoring soaring house prices they might have given themselves some leeway to play with now.
They didn't so no doubt about it - if they are damned, THEY DAMNED THEMSELVES.
13. Mjchum said...
Nohpc . . . they (BoE/Govt) put us here. Not necessarily with low rates (UK's have still been high at there lowest point compared with the rest of the world at the time), but with not just lax, but seemingly absent lending controls. One the last times I was in the Far East, found several UK residents living out there on Incapacity Benefit or whatever it's called. But here's the thing that really appauled me, this guy had not worked in 7 years and yet still was given a credit card, consequently . . . 3 weeks later . . . and £4k in debt . . . no hope of paying it off . . . because he had no bloody job!!! When I asked, "How did you get that?", reply "Oh, I just filled in this form at a petrol station". WHAT!!! This the kind of nonsense that has led to the boom, this junk credit flooded the market, fuelled the economy, masked the fact that we don't do anything anymore (£5-6Bn/month trade deficit) and created what is now a BS economy.