Thursday, Feb 08, 2007
Tough call - but we expect a hike today
MoneyWeek: Will interest rates hit 5.5% today?
It’s that time of the month again. Anyone with a variable rate mortgage will be nervously awaiting noon today to find out if the Bank of England is going to make life more expensive for them or not. Should they be worried? Probably.
Posted by mary @ 10:23 AM (124 views) Add Comment
19 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Bubbles. . . said...
Im for an intrest rate rise. I think the MPC are coming to their sense's and waking up!!! .25 raise today will make more sense than keeping them on hold and inflation running totally out of control...As it is already..Houses going up by 1000 a month how ridiculous it just makes the whole thing even more of an inflated bubble...Pass the hot potato round who's gonna be left with the burnt hands...
2. C'mon Correction said...
We are talking about one of the most Dovish central banks in the world so who knows? To raise is a no brainer going by current data, depends on how much they believe in their quarterly inflation report; which to me is woefully in-accurate.
If they don't raise - it is just delaying the inevitable.
3. harold said...
Very tough call, but IMHO I think they'll hold off until March. Hope I'm wrong.
4. sold 2 rent 1 said...
If the idea is to stop wage inflation taking off then they may go up today.
Remeber most wage deals are done in Q1
5. Pedagog said...
But surely an interest rate rise could add to wage inflation?
6. tyrellcorporation said...
I can't see the point in dithering really as this is Mervs final chance to halt the rise in inflation before the next inflation report a month away.
7. paul said...
No, tyrell they've decided to dither after all.
I hope inflation bites them in the arse - they have no excuses at all.
8. Gingerbread said...
putting off the inevitable is what the MPC seem to be good at.
9. sovietuk said...
I wonder who has BTLs on the MPC, perhaps the minutes will reveal the answer.
10. paul said...
"I wonder who has BTLs on the MPC, perhaps the minutes will reveal the answer."
I can bet the minutes won't! The MPC members have never had to reveal conflicting interests, which is one reason why I believe the concept to be fundamentally flawed.
11. inflation is eating my savings said...
For the MPC not to have any vested interest, they would have to live on Mars. Actually, they might wish to prevent property development on Mars (perhaps they don't like Chelsea tractors in their backyards) so even there their opinions could be questioned. In the light of it's so-called independence, it is interesting that there is an American on the board, but no Europeans. Has there ever been?
12. sovietuk said...
Oh dear sterling is dropping like a lead balloon since 12 o'clock
13. C'mon Correction said...
Had they raised and sent out a solid message that credit needs reining in fast, I would argue that possibly 5.75% would be the peak for a while. If they dither any longer than next month then I think we'll see 6.25% within 18 months.
Let me guess their reasoning - "inflation will remain high in the short-term and then revert back to target in two years". We've heard it before - 2 years ago - the reality is quite different.
14. Flintster said...
Great! As far as I'm concerned, this madness still has a bit of steam left in it yet. Inflation, no matter what the CPI says is creeping up steadily. And as for the BOE being concerned about a wage price spiral; what a lot of nonsense. I don't think I have seen any wage negotiations in Scotland this year under 4%. This is double what GB was hoping for; double 100% more! And yet no action by the BOE. This is purely, plain and simple, political. Anyway once GB is PM, all the economy's problems will come to the fore. There is absolutely no question that a massive correction is coming. Just not yet. And as I said at the start of my rant; let it run a little longer. The longer this goes on, the more severe the correction. Try to stay debt free and have as much savings as possible. That is the best piece of advice I could possibly give anyone just now in this economic climate. Utter Madness!
15. tyrellcorporation said...
Again they've squandered the chance to send a clear signal to the indebted consumer. Let's hope that Merv has to write that letter next month then...LOL!
16. David20040_0 said...
Told you the BoE has no balls.
17. Bubblicious said...
This was the right decision. Based on the consumption numbers and the confidence indices, the UK consumer is proving indifferent to the rate rises. Another rate rise so soon after the January surprise would not really have had much impact on the consumer psyche. I think the bank is playing the waiting game so that people start to feel some pain before acting again. That would make the next rise more effective in controlling inflation.
In the meantime, British Gas is cutting prices 17%. Based on the US experience, this is going to flow straight into consumption and maintain strength there. You will see further rate rises. That is not in doubt.
18. Albertini Albertino said...
GOOD DOVING!!
19. george monsoon said...
The frog is simmering nicely!
I recon hold again next month and a rise in April.