Monday, May 07, 2007
Grim Reaper sharpens scythe
Independent: Fear of half-point hike in base rate unsettles City
The Bank of England's Monetary Policy Committee is widely expected to lift the base rate by a quarter-point to 5.5 per cent when it meets on Wednesday, the fourth such increase since last August. However, some experts say rates should be jacked up by a hefty half-point to 5.75 per cent. They argue that a short, sharp shock would be more successful in bringing inflation back to target than continuing with a softly-softly approach.
Posted by cheeky charlie @ 09:20 PM (213 views) Add Comment
2 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. Whiteknight said...
i agree that unfortunately the most likely thing is for the committee to continue to think it can manipulate the market by hinting at a 0.5% and then raising 0.25% to generate relief.
This would obviously be an even worse strategy, but that hasn't stopped them yet. Hopefully soon they will start behaving like adults and realise they actually have to administer the medicine.
Dont hold your breath on it though.
2. royston said...
There is no chance of a 0.5 rate cut on Thursday. Last week, Mervyn King did a lengthy interview with the FT in which he said that the MPC needed to improve it advance signalling so as not to rattle the financial markets. The concensus expectation is for 0.25. If the MPC was leaning towards 0.5, or 0, they would be signalling as such by now.