Monday, May 10, 2010
BOE leaves rate at 0.5% with QE suspended (for now at least)
Citywire: Bank of England leaves interest rates unchanged
The Bank of England has left interest rates at a record low of 0.5% for a 14th consecutive month as uncertainty about the levels of government debt here and across Europe remains a worry for policy makers. The Bank of England's announcement was delayed because of last week's General Election.
Posted by jack c @ 12:14 PM (2018 views) Add Comment
14 Comments
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1. Petre Kiddle said...
While the Government continues to lie about the real rate of inflation, the poor saver continues to give the banks free money and to bail out the losers who have paid too much for their houses.
2. orcusmaximus said...
QE suspended within days of the election?
If this is not a coincidence, then it can be seen as an admission that we would still be in recession but for QE, and hard times are ahead!
3. fallingbuzzard said...
Thats very misleading from Citywire. There is no statement that the MPC had voted against pumping yet more money into the economy. They would have voted to maintain the size of the APF at £200bn. These are very different things. More QE inside 3 months to counteract the effects of public spending cuts
4. layers said...
I'm beginning to think that casio will stay open a while longer until a soverign debt default actually happens, and given today's $1Tr 'fund' for the Eurozone, it's going to be business as usual for some time. Sure, the day will come, but I don't think it's going to be immenient. Actually, the UK should now default first and get as much of the pot before there's a mad rush on!
Having said that, the UK's austerity measures will come to pass, once the Lib / Lab / Con horse-tradding has finished and then it could get ugly.
5. paul said...
Let's just remind ourselves - our central banks' laissez-faire attitude towards runaway inflation is exactly how the financial crisis was created in the first place and now the solution is ... more of the same.
We'll see what Wednesday's inflation figures say. If it's gone up again, there is definitely a case to be answered.
6. jack c said...
fallingbuzzard - the BBC are now displaying the following - "UK interest rates kept at record low of 0.5%" see http://news.bbc.co.uk/1/hi/business/10104900.stm
My understanding is that they will preserve the existing expansion package but won't inject further 'money' at this stage
7. quiet guy said...
Not changing interest rates was a no brainer. The MPC would'nt do anything that might be viewed as controversial while we don't have a working government.
8. Nod2glod said...
'Given the political and fiscal uncertainty enveloping the country'
i bet next month, despite inflation way over target, the excuse will be something along the lines of: Given that the new government is yet to release their emergency budget, it's most prudent to keep rates at 0.5%
ECB printing ~1T USD, globally governments are implementing a inflation solution to the debt problem, god help any one with wealth in paper money.
9. Crunchy said...
6. quiet guy
Spot on.
10. gone-to-colombia said...
@ 6 - Exactly.
11. paranoia blue said...
No brainer, but also, literally, a "no brainer!!"
12. 51ck-6-51x said...
paul said, "our central banks' laissez-faire attitude towards runaway inflation is exactly how the financial crisis was created in the first place"
I get what you mean, but... the thing is the state allowed the "independence" of the only central bank, dealing in the only legal tender (aka forced tender), and we then think that this is laissez-faire, but it's not! Rather it is a legitimised monopoly (aka government monopoly) which is far from laissez-faire by definition. Don't let them fool you into thinking the free-market is to blame, that's what they /want/ you to think.
13. Crunchy said...
9. 6s
Good man.
14. fallingbuzzard said...
@6 - I'll wait to see the minutes but I bet they didn't vote against an expansion