Thursday, Feb 08, 2007
Bank holds rates
Bank Of England: Bank of England Maintains Bank Rate at 5.25%
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 5.25%.
Posted by rep013 @ 12:06 PM (173 views) Add Comment
16 Comments
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1. Lvmreader said...
Unbelievable. These folk needed to have these rates at 6% last year.
To defend the currency, we will need to see LIBOR at 10% very soon. Otherwise, why buy Sterling?
2. bidin'matime said...
Oh. We shall have to look forward to the inflation figures in due course.
3. David20040_0 said...
No fucking balls from the BoE
4. talking rot said...
Boo Hoo.
5. Albertini Albertino said...
Wonder which way Dove-id Blanchflower voted.
6. dohousescrashinthewoods said...
Anyone for gold and index-linked savings certificates?
What's your favourite inflation hedge?
7. Whiteknight said...
A big mistake I think.
I believe some on the MPC committee have almost started to believe their own stability propoganda about contained, low inflation. There was some worrying comment in last months statement about not wanting to look like they were "moving in haste" and "damaging their credibility" by moving at a time other than to coincide with the inflation report. That will be the least of their worries shortly.
This is not living in the real world. If a big truck is coming to run you over - you move swiftly and smartly to the side of the road. The analogy holds here. Move rates smartly higher and quickly before we are looking at more "shocking" and "unprecedented" HSBC type announcements and further strikes in demand of higher pay rises.
I do not wish to be overly harsh but they are paid to be experts not to learn on the job. This involves drawing on past experience of how markets have behaved every single time in the past and also how inflation as behaved every single time in the past.
Anybody reading this website could surely sit around respond to a quarterly inflation report (being a significantly lagging indicator). Infact, if some of the committee believe in such steady rules based approach maybe they should relinquish some of their duties, salary and responsibilities to some people here who can follow them.
Some members have direct responsibility for banking system stability. HSBCs announcement alone yesterday should have caused significant alarm and this is EARLY in the credit crunch cycle. We haven't even warmed up into the feedback loop yet.
It has to be said for the record, even if it won't benefit any of us.
8. Sam said...
well I guess it means we're 100% on for rise next month. I hear there are gonns be a few major organsiation announcing layoff's in the next few months.
9. sold 2 rent 1 said...
I just wanted to comment on the housing affordability index (HAI) graph produced by Lombard Street Research
From October 2006
http://www.telegraph.co.uk/money/graphics/2006/10/02/cnhouse02big.gif
To start with LSR are seen as the most accurate of all predictors
http://www.mortgagesorter.co.uk/house_prices_forecastTO291206.html
2006's most accurate house price predictions were by Lombard Street Research, who correctly predicted an average increase of around 10 per cent for this year.
LSR had the highest 2007 forecasts with anticipating 10-15% price rises
Here is the recent history of the HAI (please refer to graph)
Date index
Aug 06 98
Oct 06 96
Dec 06 94
Feb 07 91 (estimate after Jan rate rise, HPI and today’s comments – see below)
Today’s comment in the Telegraph
“Diana Choyleva of Lombard Street Research warned the recent behaviour of the Bank suggested it no longer had full control over the economy. "Not only does this show in excessive growth now - more importantly, the almost inevitable reversal suggests a sharp correction by 2008,"
I think that the graph will hit rock bottom at 81 index points when prices start falling big-time. The graph will mimic the crash of 1974 in terms of housing affordability
We are now into the danger zone (below 95 points) and dropping fast.
If the trend of dropping 1 index point a month continues then 81 points will be reached before the year end. If the trend is 1.5 index points a month then we will see 81 points by the autumn.
10. Speculatorone said...
I am looking for a new house at the moment!
I might just hang on in rented and see what the next few months/year end bring?
11. tyrellcorporation said...
I feel this decision owes more to 'being seen to be in control', a steady hand on the tiller, etc. They are trying to claw back some credibility. March is looking very positive though for a ries to 5.5%.
12. Andy said...
Oh dear,
they've forgot where the breaks are.
13. dohousescrashinthewoods said...
I noticed the announcement from British Gas about energy price cuts was sweetly timed for this morning.
Bless.
14. Speculatorone said...
I noticed the announcement from British Gas about energy price cuts was sweetly timed for this morning.
Bless.
Are you trying to say our sytem is corrupt and fixed by the money men??
15. Rayman740 said...
According to an Jan 07 .pdf file u can find on the internet Barclay bank predict that interest rates will peak at 5.75% and the stabilise around 5,25% within the next 12-18 months.
http://www.business.barclays.co.uk/BBB/A/Content/Files/Interest_and_Exchange_Rate_Outlook.pdf
I don't believe in any general and widespread growth in prices but I can't see a crash at all. Stagnation.
16. dohousescrashinthewoods said...
=)
Either that, or a bunch of nervous incompetents, struggling to keep their heads above water - in other words, much like the rest of us.
Some may have huge ego cob-ons and think they are powerful but they are just as human as the next chav.
If the government makes the people stupid, they themselves will be ruled by idiots when they are retired.
Poetic, albeit tragic, justice.