Thursday, Jun 14, 2007
A crippled MPC on the brink of irrelevance
Times: Rate rise ever more likely as inflation fears grow
Bank of England's inflation survey shows expectations are at highest level since survey began despite rate rises “The Bank is running out of excuses for dragging its feet - we believe there is a strong case for a hike at the July meeting,” said Alan Clarke, an economist at BNP Paribas. MPC's credibility is low, doubts on its independence are high.
Posted by confused76 @ 10:39 PM (127 views) Add Comment
5 Comments
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1. sovietuk said...
The denial among people wishing for continuous low interest rates is astounding. Interest rates are going up and up ...... and up. As the last record at the party plays the guests glance at each other with increasingly worried looks. A few of the guests in the room know what's coming, the vast majority do not. It will be hard for most people to adjust to Eastern European living standards.
2. Exiled said...
i doubt very much its independancewhat about that reduction in interest rates about a year or so ago, frankly that quite amazed me.
3. David20040_0 said...
I thought the CPI had just dropped making increasing interest rates less likely.
If 2.5% CPI is high and justifies a 0.25% rise in the BoE base rate, surely 3.1% CPI should have justified a 0.5% - 0.75% increase in base rates.
4. Stoatgobbler said...
The issue is if the BoE are behind the curve or not, and judging by activity in cable and the futures markets, they aren't.
5. Ah-so said...
I notice that the press and mainstream economists always give the peak of rate rises as well below where they are being priced at in the financial markets. 6.25% is now the rate charged by the market, suggesting 3 more rate rises. However, few economists say this and the VIs at the mortgage always like to claim that interest rates are about to start falling.