Thursday, Jun 21, 2007
true intentions of MPC doves
The Telegraph: Governor's defeat last time heralds rise to 6pc
Might Mr King have been secretly doubting their true intentions? His first term as Governor ends next year, and some in the Bank suspect that a couple of the committee members are voting with half an eye on his chair, knowing that if Gordon Brown chooses not to reappoint Mr King he will baulk at appointing another hawk.
Posted by sold 2 rent 1 @ 08:48 AM (122 views) Add Comment
9 Comments
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1. Orwell said...
Soon showing in the UK...
IR's at 7.5% at least !!!!!
2. royston said...
"another hawk"!????!!!!!!! My God, there is no hope for us!
3. royston said...
Anyway, I thought that appointing the Governor of the Bank of England was the Chancellor's job - Brown won't be Chancellor next year. Whoops, I forgot - Stalinist personality / no strong rival to put any brakes on him, like he could on Tony Blair. There really is no hope for us. Somebody has sold our souls and we are in the clutches of Satan!
4. paul said...
What worries me is that Mr Brown has the power to appoint a dove or a hawk.
We've seen the frutis of complacency and we're likely to continue to see it. I forsee bad things ahead for the MPC members because they're leaving the economy wide open to external shocks.
Like I said last time when inflation exceeded 3%, having failed outright to make the correct decisions, they should have been summarily fired from their positions.
After all, if they were in those kind of extremely highly paid jobs in the private sector and had made these kind of mistakes, they would have been booted out of the door long ago.
5. Hard Cheese said...
You reap what you sow, now its pay back time and they can't face the back lash.
Brown will install/clone another one of his cronies, just you wait and see.
Alternatively, call me cynical, but perhaps, they are buying time to off load there assets before the long over due down turn.
I believe that they are all corrupt in one way or another and only told react to a situation by external influences.
Why can't we have a spell checker on here?????
6. uncle tom said...
What this piece misses is that two of those who voted for no change (Tucker & Barker) are not generally on the side of the doves. They probably preferred a more measured pace of increase, so not 'no' but 'not yet'
On July 1st, China will be announcing increases in export taxes (or, more precisely, a reduction in export tax rebates) If my contacts in China are correct, this will add around 0.2 - 0.3% to CPI
This will push inflation toward the top end of the BOE's fan graphs, so a rate increase next month now looks highly likely, and 6% at year end remains highly probable.
7. wage slave said...
So much for our 'independant' MPC.
Instead of a dove or a hawk perhaps we could appoint a baboon instead. It couldn't do much worse.
8. Andy said...
From the miutes: "by raising [the MLR] now, the peak in interest rates could eventually be lower".
That's the key sentence. If 6% is already on the table for the end of 2007, then the "peak" which, had rates been raised in June, could "eventually" have been lower, must be more than 6%. Any offers? With 10-year swap rates already at 6.2%-6.3%, retail lenders will have to charge a percent. or two more just to stay in business. And that's without any more inflation appearing on the horizon. Anybody for 9% or even 10% by end 2008?
9. Planning4acrash said...
Uncle Tom, the BOE's fan charts cover 90% of the probability. There is no reason why a structural change in inflationary influences won't result in the fan charts being exceeded. By the MPC's own admission, there is a 5% chance of exceeding it, given assumptions in the last inflation report.