Thursday, Apr 05, 2007
No Change!
BBC News: UK rates left unchanged at 5.25%
Pusillanimous B@st@rds!
Posted by royston @ 12:04 PM (255 views) Add Comment
46 Comments
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1. george monsoon said...
and todays word is Apathy...term for a state of indifference — where an individual is unresponsive or "indifferent" to aspects of emotional, social, or physical life
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
2. The Haunted said...
Pathetic, spineless idiots. As much as GB deserves to take a lot of blame for what has happened to our economy and the ludicrous debt culture that has spewed forth, these jokers must also share some of the responsibility. The way that Gordon, Mervin and the rest have miss-managed this countries finances borders on criminal neglect and when the finger pointing starts I hope that they get what they deserve. They are not even worthy of the title 'Clown', they are, in fact, Clown's Shoes.
3. harold said...
And the message from the MPC is "party on" (= heavy hangover).
4. Eddie_lomax said...
Cannot now remember when this made up official rate of inflation was at its 2% target yet they still continue to do nothing no doubt to try and avoid a HPC. Strange really as when the house price bubble was growing massively they just sat on their hands and explained that property prices were not their remit.
I do believe trouble borrowed will be paid back with interest compounded by sorrow.
5. Fed Up said...
Sod this i'm emigrating!
6. doomwatch said...
The MPCs inaction reminds me of the Federal Reserve in 1929. And we all know how that bubble ended.
7. Crashhorizon said...
Just sent an angry e-mail to the Bank of England. Suggest we all do the same??
enquiries@bankofengland.co.uk
8. sovietuk said...
A "keep the plates spinning at all costs" decision. The show will eventually end, the magician will faint and the plates will come crashing to the floor breaking into lots of small pieces.
9. Fahrenheit451 said...
And the big picture is ... its going to up sooner or later.
Anyone want to make a prediction ???
10. george monsoon said...
What the Bu@@er are they playing at?
I am assuming that the MPC are privy to some enlightening information that is unavailable to the rest of us, because it does not add up??
Its like watching England bomb out of the World Cup.. in the last few minutes they start to pull out all the stops in a futile attempt to pull a miracle, but the end is always inevitable.
No bloody change.. It beggars belief..!
My prediction is one further rate rise in may or june, then the idiots will try to up the market again towards the end of the year by dropping them. Probably when a Euro is worth roughly the same as £1
11. Chiswickian said...
So now that's over for another month I expect to see newspapers and other media contradicting their "house market continues to weaken due to interest rate increases" stories with "House prices up another x% today, UK property market goes from strength to strength" articles. Then they call roll out the "house market weakens, blah, blah, blah..." stories again this time next month ! Call me a cynic !
12. p. o. o. r said...
So another month goes by - inflation is increasing - prices all around are going up significantly - and the MPC are doing nothing about it - THIS IS GREAT NEWS - What they are doing is ensuring that when the crash happens it is going to be BIG! .. Also My guess is that 'Brown' is putting pressure on them to keep rates on hold certainly until it is confirmed he is in the top job.
13. Mrmickey said...
I think the key to setting interest rates is the value of Sterling, unless the £ tanks they will not raise interest rates with any urgency.
14. mrmickey said...
I think the key to setting interest rates is the value of Sterling, unless the £ tanks they will not raise interest rates with any urgency.
15. Tony Marshall said...
Eddie George's challenge to his successors (re the overheating property market) was 'sort that out' - they have yet to rise to this challenge.
16. Sonic said...
Houses prices are still going up, Halifax 1% in March yet the BoE takes no action.
God I'll bet they'll drop rates soon.
Well no chance of any slowdown in the hosuing market then.
17. bidin'matime said...
The BBC business news front page (http://news.bbc.co.uk/1/hi/business/) has the following summary under the Headline "UK rates left unchanged at 5.25%":-
The Bank of England votes to leave interest rates on hold at 5.25% for a second month in a row.
Sales rebound on the High Street
UK inflation rate rises to 2.8%
Sums it all up, really.
18. A Saver said...
Anyone think about taking legal action against the b*st**ds?
No doubt they all bought big into real estate years ago, knowing how long they were going to keep interest rates down at a ridiculously low level. It's called insider trading guys!
19. tyrellcorporation said...
I like the way the BBC announced it on the news today. 'Homeowners have been spared a rise in IRs', For f**ks sake, homeowners are apparently making about £2k a month from rising prices, I'm sure an extra £20 a month on their mortage payments won't really matter and certainly wouldn't mean any hardship. They'd make up that shortfall in about 4 hours!
I'm totally dumbfounded! ... but not that surprised anymore.
20. converted lurker said...
I disagree you're all searching for some 'armeggeddon scenario' for personal benefit (understandable) ignoring the wider picture. Once rates reached 5% HPI effectively died throughout the regions, only NI and London keep the figures from falling, further rises will have to happen, perhaps we'll reach 5.75% by August (one rise June one August) to control inflation caused by the increase in money supply.
21. C'mon Correction said...
I agree Lurker. We'll still see this year out with rates at 5.75% at least. M4 supply over 10% last month says it all. There is no doubt at all the next move is up, and it won't stop there. Unions will battle VERY strongly this year over cost of living, expect to see wages spiral over the next few years.
22. confused76 said...
Noone wants an "armageddon" here, but probably believe that the longer the property market is allowed to stay away from "fundamentals" the bigger the correction will have to be, with worse consequences for the economy in general.
Let s not be naive and lets not forget that the property craze is benefiting just few speculators. If the asset bubble continues to grow it will be a handful of Soros-like "short sellers" that will profit in the end. The sooner the MPC wakes up the better. But I am afraid that the pressure of the Blair-Brown handover is now driving decisions.
23. Dunk said...
UK residential property is now a perfect (textbook) short selling opportunity - if only there was a liquid way to short this market.
24. Sohiab said...
I have been reading HPC for years. Im shocked by the BOE again. Its now time to buy a house as Im getting on a bit and will be waiting for the rest of my life for this dumb crash! Today is a sad day but I guess its time to buy. Though, it'll end one day I dont think were gonna see it any time soon. Oil prices should start going south over the next couple of months so it;ll only cut inflation!
25. sovietuk said...
" think the key to setting interest rates is the value of Sterling, unless the £ tanks they will not raise interest rates with any urgency."
I agree. MPC will not move upwards significantly unless Sterling wobbles. However Sterling against Euro is not so rosy so fingers crossed foreign banks will start dumping £ and $ in favour of Euro. A badly sliding pound will make the the MPC jump like a frightened mouse.
26. Jolo said...
Inflation has gone from 2.7% to 2.8%. i hope the next report out on inflation now embarres'ss the MPC i wouldn't be surprised if the vote was 8-1 (blanchflower preferring a cut!!!!!!) what is it with these people?
27. george monsoon said...
Does anyone know what property the MPC members own? Keep your eyes out for the "for sale" signs on them.. Then once sold they can cash in and cause the crash.. buy more..etc..
Yes I know its a conspiracy theory, but it is entirely plausible and could go un-noticed, or even allowed as a "perk".
28. Davros said...
The damage has already been done at the start of the decade. All that's been borrowed has to be paid back, which will create a recession. Even if rates were dropped again, it'll just make the problem worse in the long run. In the absence of significant earnings growth, it's inevitable...
29. uncle tom said...
Be patient. There will probably be a rise next month.
But more significantly, start watching the differential between the base rate and rate offered to borrowers - especially for sub prime and BTL loans. This looks set to rise sharply (although it may be obscured by even higher arrangement fees)
The unfolding sub prime crisis in the US means that reckless lending is no longer cool. Some borrowers who have been flying close to the wind may find themselves unable to re-mortgage, leaving them at the mercy of a punitive SVR.
The party is just beginning to warm up - at last!
30. Sam said...
Sohaib if you need to buy a house to live in then by all means buy but if you find yourself renting you might be better off as you do save money on running cost over a 5 year period. - but to be honest if you do buy you may end up having to spend ten years living in a hovel rather than a milder 2 bedroom house.
I think you'll find you are wrong over the price of oil - summers coming and the US demand for holiday petrol is very high which causes the price to go up june/july/aug.
I doubt they'll rise next month but the 'threat' will always be there. I think we'll see this go on till Gordo becomes PM - and perhaps calls a quick election. - if he loses the tories will over see one of the worst economic periods in modern history. if he wins he'll have till 2011/12 to have the downturn and come out the other end looking a lot better (which may be easy as everyone will be 'happy' due to the olympics).
31. royston said...
Whether or not it was part of the intent, this decision has certainly shifted the focus from Gordon Brown-Stuff and his raid on our pension savings. That man has a lot to answer for, whatever way you look at. He set up the structure that leads to decisions of inaction like this. I know - let's make him Prime Minister! ( - talk about getting promoted out of trouble!)
32. George said...
So it's true these bast@rds are corrupt. What's new...Roll on Canada
33. harold said...
Major blood-letting on the FX markets. keep an eye on the dollar against the euro too - year lows today. Looks like the US's anti-plunge protection teams are having trouble.
34. Goldmercury said...
my email to MPC, if you don't ask you don't get!
Hello,
can you increase interest rates a bit over the next few months. I'm trying to save for a house but the savings are being out stripped by the house price inflation. I need you guys to do something about this situation, I would suggest you increase the rates or I'll be moving to the US to pick up a house (they are now falling back to an affordable level there)
thanks!
-Scott
35. Fahrenheit451 said...
Hope this helps sort out Dollar/Euro or Sterling/Euro comparasons:
http://www.dailyfx.com/charts/ChartStation.html
Basicly you can compare the currencies at daily to monthly intervals and generate a chart going back to about 1980.
I could offer some interpretation, but I'm in a rush so cannot get it into the blog.
Then make your own predictions but you need to see the seasonal variations.
They always seem to make the Euro more expensive for the summer holidays.
Tip, use your own Bio-Desiel and fillup in Andorra, prices there are the same as in UK (except that its in Euros, so a 100 Pound camera = 100 Euros) and its the same for fuel. 40 Pounds for 55 liters = 40 Euros.
Easter holiday ... about to join the crush on the road.
Now why could we not have a proper Transport Policy and cheaper cleaner trains, but that's another story not House Prices.
36. doomwatch said...
I am presuming the MPC are not meant to be politically motivated, but it almost looks liike they are trying to delay a crash until
after the election. They are certainly not acting to benefit the man on the street, so who benefits ?
37. george monsoon said...
Whatever their reasons, they are demonstrating a flagrant disregard of the facts.
As Uncle Tom quite rightly says, be patient, it is quite obvious that something has got to give somewhere.. We are all impatient, not least of all me!
Can anyone advise where to invest money to smooth a rocky ride in the next few years.
38. Jackpot06 said...
Indeed a very very bleak day --feels like the last straw for me --all the local agents in Poole think I'm a joke cos Ive said about a potential crash --there is no way the powers that be are going to allow any kind of thing to happen --I have a significant sum in cash and simply dont know where to put it for safety --but out of principle I intent to take it out of this country --we have been shafted folks --savers are being taken to the cleaners ---this is a morally corrupt bankrupt government --
39. taffee said...
I buy actual gold....try this link
http://www.bullionvault.com/?referrer=GOOG&gclid=CNOLjf38q4sCFSYSQgodOn8RVg
40. nearly30 said...
WOW - they have balls!!
I thought they might do this - so they would get more house hungry punters through the doors from now till June.
Knock yourselves out. Oh well - will see no more rate rises till June. Hey if the whole house buying public go made for it - they will even be slashing IRs in June.
I would slap myself for saying that - but we have definately hit silly season - and the zenith of the Abilene Paradox (please also see Gordon Brown Pensions).
Imagine a committee of bright people making a stupid decision. We know from talking with each person alone that each and every one of them thinks it's a stupid thing to do. When the committee votes, however, they choose to do the stupid thing! Later, usually much later, when the decision backfires, the committee tears itself apart in its search for a culprit. The group desperately needs someone or something to blame, long after the very preventable decision was made.
41. harold said...
In case you think we are in a new paradigm, consider these famous quotes:
"No generation has a right to contract debts greater than can be paid off during
the course of its own existence." - George Washington to James Madison 1789
"We hear sad complaints sometimes of merciless creditors;
whilst the acts of merciless debtors are passed over in silence." - William Frend, 1817
"I place economy among the first and most important virtues,
and debt as the greatest of dangers to be feared." - Thomas Jefferson"
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the
currency system involved." - Ludwig von Mises
"The decline of great powers is caused by simple economic over extension." - by Paul Kennedy
42. Ticktock said...
Surely nobody expected the BOE to really target inflation? (even the make believe RPI/ CPI type?). The BOEs job is to create inflation, while pretending to be stamping on it. They have clearly now failed in the latter task, and about time too.
For me this is highly significant. That the BOE is prepared to gamble with its credibility, and thus its 'independence', suggests real fear of damage in raising even 0.25%
I'm delighted so many are becoming able to see through the deception. I suggest we all bare this in mind when considering future investments!
43. uncle tom said...
Harold,
Here's another classic for your collection:
'My other piece of advice, Copperfield,' said Mr. Micawber, 'you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and - and in short you are for ever floored. As I am!'
(From Charles Dickens: 'David Copperfield')
44. Malasco said...
Wait till next winter. ie September/October 2007.
The US woes will slowly reveal themselves to be 'really serious', and the dollar will have reacted accordingly. The joys of spring and summer will have faded as the BOE realises that they have to contend with the US fall out and the fact that inflation has hit the fateful letter-writing 3.0%.
Personally I think this is all good news (from a rather warped point of view). Re the 1929 crash - the overwhelming opinion was that recession would never happen - 'The bigger it is the harder it falls'. Given the current state of the world assets, I welcome any further inflation - the market lost common sense a long time ago.
Roll on BoE; bury your heads in the sand. We, who are waiting, with savings, applaud the fact that -
1. Despite the risks of your 3.0% letter
2. Despite the general woes in the US, despite the house price problems in US, Eire, etc,
3. Despite the risks to the global credit boom and the 'carry trade',
you think you can bluff it out for a little bit longer.
I say YES! Why should you heed any of these warnings, reduce interest rates now, because just like in 1929 - we are in a different paradigm where all is rosy and nothing bad can happen! Do it, go on drive those interest rates down!
Here's a curious thought - in the old days where politicians really f*cked it up, they were penalised by never getting elected again. But the BOE? Hey - it's a group of independent individuals who, even if they get it terribly wrong, are sure to find work somewhere. So where exactly does the accountability lie with the BoE? Devolving interest rate setting from politicians was the best thing Labour ever did - but where does the blame lie if the BoE gets it wrong.?
Just a thought.
Happy Easter everybody
Malasco
45. Tony Marshall said...
I've just written this e-mail to the Bank of England:-
"Sirs
Eddie George recently said that rising asset prices (principally property) were a bi-product of his policy of keeping interest rates suppressed during the early part of this decade – he said that it was his legacy to his successor to ‘Sort it out’ - can you tell me what steps the Bank is taking to sort it out?
Today’s decision to keep rates on hold just sends another signal to the market that all is well and buyers have nothing to fear. Property prices are widely accepted to be wildly over-valued, but as most people with influence have a considerable investment in property, few will countenance a crash and plan accordingly. But a crash will happen when everyone is spent out and there is no one left willing to move up or buy-to let. The higher prices are allowed to rise in the meantime, the higher the over-stretched borrowing, the more the economy becomes reliant on property based borrowing and the more catastrophic will be the crash when it comes.
With the money supply increasing at double-digit rate for several years, higher inflation is inevitable unless stronger action is taken to forestall it – failure to take the necessary action at this stage in the economic cycle is a classic mistake that generations of economic regulators have made – when they were politicians influenced by the need to keep their electorate sweet this was perhaps understandable, but we are told that the Bank of England MPC is independent. For how much longer, I wonder.
Another small rise this month would have followed the pattern of recent small rises and sent a subtle message that the Bank meant business, but would not have caused panic. The longer you leave it to get the property market under control, the larger the impact of its collapse will be. The Bank often says its policy is to keep inflation within range of the target and not to control the housing market, but, like Eddie George said, you have to ‘Sort it out’ – otherwise its collapse will swamp the efforts of all of us to maintain financial control."
I shall let you know if I get a reply...
46. bidin'matime said...
Uncle Tom - are you the same Uncle Tom who frequented these pages for many months before disappearing at the end of last year? If so, welcome back! We all thought you'd jumped ship. Not that anyone would blame you - it still seems a shrewd purchase last year could be making you a good profit by this year - if you can find someone even more bullish to move it on to...