Friday, Dec 07, 2007
Cheap Money Junkies: Gimme More ... Just One More Hit ... Gimme More ...
Guardian: Bank cuts rate but City now wants more
The build-up to the next general election could see interest rates cut to 4% as the Bank of England seeks to avert a crisis in Britain's overstretched housing market, the City was predicting last night.
Posted by quiet guy @ 01:35 AM (246 views) Add Comment
4 Comments
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1. Dohousescrashinthewoods said...
I thought this was a superbly damning and subtle statement. Seems to me that by putting "run up to election" and "see interest rates cut to ..." in the same sentence, the Telegraph are stating that the MPC is not independent. They then put the boot in by saying that the bank is purposefully trying to save the housing market.
The irony is that nothing should be further from the truth than those two statements, but many (and most here it seems) are wondering whether that really is the case.
2. Hpwatcher said...
House prices in this country seem to be the measure of absolutely everything......
3. Bystander said...
Ofcourse they want more cuts, this is their opportunity to gain some momentum into their Bonus led lives. The FTSE jumping 3% on the sniff of a rate cut..come on BoE, you should be looking out for the future of the country, not short term fixes to ease the consciences and fill the coffers of the financial services. Do not forget that they presented a 'moral hazard' with the free and easy lending ethos, that got us into this scenario in the first place. England is a place of easy debt and no responsibilities, no wonder everyone wants to live there.
4. alan said...
I don't think tightening of credit is a bad thing in itself.
For a start, it makes individuals and governments look at how they are spending their money and are they getting value for it. Tightening of credit forces people to make a plan, instead of aimlessly wandering forward without any proper objective in mind.
The article suggests IRs of 4% to encourage a "feel-good factor" before the next election. I don't think Gordon would be that cynical and nasty. If that was the way things were played, I think Mervyn would resign, I think he has integrity.