Wednesday, Jun 27, 2007
Pen in a rate rise for July
BBC: Rates too low, Bank deputy says
UK interest rates are too low and are helping to drive demand for loans and credit, Sir John Gieve, deputy governor of the Bank of England, has said
Posted by holding out @ 08:39 AM (163 views) Add Comment
11 Comments
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1. David20040_0 said...
Put them up to 8% and then I can watch my money grow :)
2. japanese uncle said...
Laughably same old story. If they have been seriously concerned about the monetary health of this nation for a nanosecond, how on earth could they possibly dare to lower rather than raise the IR in 2005, in the presence of every familiar symtom of a housing bubble accelerating? Clearly they wanted another bubble, a very big one this time around, as same as FRB and as the BoJ in the late 80s, all owened and controlled by the same people.
They should not think so little of the public. Some eyes are closely watching what they do all along. No thanks for another incompetence defence. If indeed they are that incapable as guardian of the monetary system, then pay back all the salaries received in the meantime, plus interest of course.
3. sovietuk said...
If 5 people (sorry - liars and traitors) voted do nothing at the last MPC meeting with inflation above target what exactly is the agenda now??? Self interest??? It can hardly be said that the stability of the UK economy is the justification - cheap credit is just making the whole thing more unstable. These self interested f*ckers will be responsible for causing hardship to millions of hard working honest families up and down the land. The noose comes to mind.
4. sovietuk said...
Sorry and the nearest tree
5. p. o. o. r said...
Now today we have Mr Brown taking over - so I would guess that the strings which have been holding the MPC are about to be cut, leaving the new chancellor to repair them - does this give a window of opportunity for the MPC do actually do their job. If it's catch up then we need a 0.5% increase next week although I don't think they would have the balls - I am still sticking that I expect rates to be 6.25% by the year end (increases in July, September and November) , and by the end of next year over 7%.
Even with all these increases I think it is too late, and in 2008 the recession / depression will start to bite people hard and very very very fast. The people that will benefit will be those who have savings (generally the older generation and are retired). As Sovietuk said "hardship to millions of hard working honest families up and down the land".
6. confused76 said...
However, he also warned that "we may raise rates too slowly with a cost in higher inflation and potentially higher interest rates and a sharper slowdown in the end"
They can safely say - these geniuses - that they have achieved that. They have been hoping, the fool, that the exhogenous factor (the oil price, the cheap immigrant workers, ...) helped the inflation stay low.
7. Ticktock said...
Brown once joked that there are two types of chancellor, those that get out in time, and those that don't. Brown has managed to escape in the nick of time ( thanks to the MPC selection policy) but surely can't just point to his unfortunate successor once the 'miricle' evaporates.
It has often been suggested that our economy is nothing but a casino, but in a casino it is 'the house' and not the speculators that eventually prevail. We have a casino, in which 'the house' loses and simply prints ever more money to pay out while expecting the value of that money to remain stable.
8. royston said...
Central banks in the West really have lost the plot!
1. They have relinquished control of the money supply to commercial banks who securitise all their debt, i.e. they convert debt into bonds / CDOs / asset backed securities to recover their capital, which they then recycle without any restraint. Furthermore, central banks now have no hope or means of regaining control over the money supply, should it be deemed prudent or necessary.
2. They use a measure of inflation so narrow that it comes nowhere near measuring the cost of living as perceived by any consumer.
3. They move interest rates by such tiny increments as lulls consumers / borrowers into a false sense of sustainability, until, like the laboratory frog, the get cooked.
4. They have created the conditions for a 21st century abomination: the adolescent credit junkie with no hope or aspiration to acquire assets.
9. royston said...
............sustained by the twin illusions of Rational Expectations and General Equilibrium.
10. japanese uncle said...
royston:
I no longer believe a word in economics texbooks, unless they address the particular issue of who really own central banks around the globe. and and how on earth are they entitled to pocket profits generated from issuing paper money by charging interest on it. This is the unearned privilege of the century, nay the millennium.
11. Orwell said...
P.O.O.R:
I agree that they are too low, but the Gulper will pull out all the stops to prevent them rising to 7.5% even though I suspect that for a small time this may be necessary!
6.25% by the end of this year? possibly. Who knows after that ? maybe 7.5% I have some suspicion but we will see.