Thursday, May 10, 2007
UK interest rates raised to 5.5%
BBC: As expected
The Bank of England has voted to raise interest rates by a quarter of a percentage point to 5.5%.
The increase, the first since February, takes the cost of borrowing to its highest level since 2001.
Posted by holding out @ 12:06 PM (147 views) Add Comment
27 Comments
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1. Scott said...
They can always raise it by another 0.25% next month, which will be the equivalent of a 0.5% rise today. This mentality probably influenced their decision.
2. dohousescrashinthewoods said...
Job done.
3. converted lurker said...
were back to 2001 levels now, any thoughts on how the excess of money supply since then will shake out?
4. sovietuk said...
Boring, a step in the right direction but what happened to the 0.5% "cage rattler" ? Wimps.
5. The Capitalist said...
Pathetic. They will rue this day...
6. mrmickey said...
That frog is really starting to simmer
7. holding out said...
Very few people were expecting a 0.5% rise. But there are plenty still betting on back-to-back rises. The last time they did that it stopped the market in 2005 and that was from a lower base. Maybe that's the best hope. Perhaps the whole thing will be swept away in economic collapse that renders their actions irrelevant.
8. dohousescrashinthewoods said...
I call a vote of no balls:
ayes: the MPC are incompetent and gutless and will retrospectively be lambasted for not acting when the time was right.
noes: the MPC are justifiably restrained. UK PLC is a shocking economic mess likely to imptode over a mere half percent.
How do you vote?
9. harold said...
Pathetic waste of time that will have little-to-no effect on deflating the property bubble: future crash it is then.
10. confused76 said...
Market signals are clear.
http://www.bloomberg.com/apps/news?pid=20601083&sid=alJLqMHyrAko&refer=currency
as soon as the IR rises stops, GBP will drop
11. Skint Academic said...
If I was being cynical then I would suggest that rather than trying to deflate the bubble the 'independent' BofE are trying to sustain it for as long as possible. They are letting the bubble inflate very slowly to give the illusion of economic growth and to keep the population happy for as long as possible. Labour then call an early general election. If they win then a further five years in power dealing with the after-effects are preferable to being out of power. If they lose then the Tories can be accused of causing economic collapse and Labour have more chance of getting in power again.
12. Maggot said...
excelent the rises will go further therfore the fall bigger .the same feeling that has took the bubble up will push it down down when it bursts
13. Maggot said...
excelent the rises will go further therfore the fall bigger .the same feeling that has took the bubble up will push it down down when it bursts
14. tyrellcorporation said...
Merv and his cronies showing real 'determination' to tackle inflation then!!!
Christ, a night out with these guys must be a laugh. Make mine a pineapple juice and soda please barman and hold the ice, I have sensitive teeth!
15. harold said...
"U.K. Pound Drops as Bank of England Rate Rise Meets Forecasts " Bloomberg.
Quite clealy the Bank of England Rate Rise did not meet the forcasts of the FX markets.
16. uncle tom said...
As expected. At this point I'd say there's a better than evens chance of another rise next month - the system needs more than a gentle tweak to cure the ills that Merv has drawn attention to..
17. David20040_0 said...
This will make no difference.
18. paul said...
http://www.bloomberg.com/apps/news?pid=20601083&sid=alJLqMHyrAko&refer=currency
19. harold said...
UT, agreed, but they'll probably wait until Blair has finally gone. The BBC's sentimentality in relation to his departure (no to mention Blair's own) is already making me retch.
20. mrmickey said...
We increase interest rates and sterling weakens, thank god they didn't drop interest rates that would really have been interesting, this shows that the BOA is at the mercy of currency speculators who obviously have not read the script.
21. Down Wave said...
Good old Sir Mervyn and his gutless Doves, they have patted their much loved grandchild IR on his head again.
22. enuii said...
0.25% will make diddly squat difference to anything and will at best knock about 1% off anual HPI, hardly worth commenting on really.
23. fahrenheit451 said...
What a wasted opportunity. Now, let's see what happens in July after GB(H) steps into No.10 and they all go on holiday.
24. enuii said...
Just had a look at the pound/dollar which has fallen back below $1.98 so the inflation figures may start to get more interesting for the B of E.
25. talking rot said...
I do not believe the stories of "6% by Christmas." We'll end the year at 5.75% and start the year with a cut.
Gordon Brown will not call an election for 3 years. He'll want to show the Country what a great chap he is as PM. He'll need to do it on a sound economic footing - no recession therefore the BoE will not be responding to the surging inflation; they will not have a need to because all inflating items will be removed from the basket.
26. Down Wave said...
If you want to complete pschological profile of Gordon Brown and Tony Blair's chronic emotional level of health, I will be happy to post it hear. It is rather long with many words, can anyone more experienced ausing this web site to upload it?
27. sold 2 rent 1 said...
"I do not believe the stories of "6% by Christmas." We'll end the year at 5.75% and start the year with a cut."
I agree. The stocks crash in late 2007 is worth 0.5% IR rise in confidence terms. After that its cutting all the way to zero.