Sunday, Sep 05, 2010
Wild speculation
Telegraph: Warning of 'sharp interest rate rise' in 2012
The Bank of England is this week set to hold interest rates at 0.5pc, but with a growing expectation that when rates start to rise they will do so quickly. Economists do not expect interest rates to start rising until well into next year at the earliest, but it is thought the MPC would consider moving quickly once the process of tightening policy has begun. "The MPC wants to remind households and firms that interest rates won't be close to zero indefinitely and that basing borrowing decisions on no increase in interest rates would be a very dangerous thing to do," said an economist.
Posted by drewster @ 12:41 AM (2599 views) Add Comment
46 Comments
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1. bidin'matime said...
Big news - alcoholic says he knows he must give up soon and promises to do so, but is having just one more drink to tide him over in the meantime...
2. paul said...
Japan still hasn't been able to raise rates to anything near normal, 20 years after their credit boom and bust. I still haven't seen anything to convince me that we're not following the same well-worn groove by making all the same mistakes.
Therefore nd its rich for the Bank of England to be talking 'moral hazard' now after creating the credit boom and then robbing the prudent by refusing to raise rates to tackle inflation.
3. enuii said...
Well do it now then rather than waiting until sudden large rises are needed. Two quarter point rises before the end of this year will serve as a shot in front of the bows and merely bring us inline with current EU rates. Can't see that making much difference to anyone or any business that is not farked anyway!
4. mrmickey said...
I think the main difference between us and Japan is they borrowed all their money from their own savers we borrowed ours from foreigners, if our creditors decide they want a higher rate of return then we'll be forced to raise interest rates or the pound will collapse.
5. paul said...
I think the main difference between us and Japan is they borrowed all their money from their own savers we borrowed ours from foreigners, if our creditors decide they want a higher rate of return then we'll be forced to raise interest rates or the pound will collapse.
Really? I think you should find it was the other way round. Japan exported their debt in the form of the yen carry trade, the UK instead has decided to ignore inflation (effectively fleecing savers).
6. quiet guy said...
Unless Monaghan is allowing herself to be being used as a mouthpiece by the Bank of England to issue some monetary policy propaganda, this article appears to be pure speculation. I suspect that interest rates will be held low until about 2015.
"There is no room for complacency," it [British Chambers of Commerce] said. "Falling house prices and further declines in bank lending to business highlight potential risks in the third quarter."
Because pricing out a generation will be so good for our economy.
7. Mr. Spence said...
Come on, who are we all trying to kid here. Does it really matter one iota if interest rates are 0.5% or if they rise to 5.5% a staggering 1000% leap! not a bit, when interest rates were falling did you or I see our mortgage rates fall say to 1.5% or even 3.5% or our credit cards fall to 5% , 10% or even 15.5% a massive 3000% above Base!?!
True if rates were to start rising above a 5.5% the Banks would then be pushing to rip the lungs out of each individual on the planet once again, but that looks like some way off right now, as I personally feel we are only now only starting to feel the real ripple effect of the downturn in the economy.
Take a Look at the Ft100 [5428 Fri Close] it wants to go north, but anyone with an once of intelligence knows it is a false dawn and 4500 looks immanent.
The Banking system have been screwing us over since the age of dawn and will continue to do so, money corrupts all.
Be careful out there.
mr.spence
8. uncle tom said...
If Japan's economy starts to contract again in the current quarter, a new wave of financial upset might kick off; forcing central banks to hurriedly take defensive positions.
Japan can't afford to pay its sovereign debt, but the markets are currently playing deaf to the fact. If their economy contracts again, the horrid truth will become too deafening to ignore..
9. hpwatcher said...
Raise interest rates?
The new socialist, soviet style BOE won't allow that.
10. techieman said...
paul - i wonder if you have been looking at M4 lately?
M4 lending decreased by £11.6 billion (0.4%) in July. The twelve-month growth rate fell to 1.6% from 2.3% in June.
http://www.bankofengland.co.uk/statistics/m4/2010/jul/provm4.pdf
the charts are worth a look.
oh silly me - they must have fudged the figures right?
this might also help : http://boards.fool.co.uk/i-once-did-a-study-regarding-the-long-term-11996627.aspx?sort=threaded
"2. The recent levels of OFC M4 lending growth do not appear to be inflationary. I say that as I suspect that the inflationary effects of this lending have already occurred. It is to some extent a catchup in Government balance sheet accounting, which may have some effect on the value of Sterling. (and so perhaps some but limited inflationary pressure)"
as i have said many times - the fixation on the BoEs IR policy is just that. its really not as imprtant for HPC as everyone seems to think. market SVRs are much more important, and these together with LTVs are adjusted in opposite directions depending on perceived risk. however decreases in m4 lender means that the BoE are unlikely to increase rates, unless forced to by the market.
11. Vox Populi said...
Once bankers learned the taste of maxmum effect through no effort business model, they will never let go this priviledge, by whatever means available.
12. techieman said...
also i am a bit confused by your comment @ 2 above. "I still haven't seen anything to convince me that we're not following the same well-worn groove by making all the same mistakes." their "inflation" numbers are as follows: http://www.indexmundi.com/japan/inflation_rate_(consumer_prices).html.
Surely your argument is that there is a difference between us and Japan, because i thought you were saying we should raise rates, but in Japan despite the fact they havent its still in a benign inflationary (to give you a break - i would actually say deflationary) environment.
i think you must know what Japanese IRs are.... dont you? i know its those baby boomers fault innit.
13. jack c said...
There is a growing swell of opinion that interest rates could rise quickly but as techie says unlikely the BOE will do so unless forced by the markets. I'll post an artice up called "The next crisis: coming soon" - bit of a long one but well worth (IMO) a watch/listen (Peter Schiff features)
TM - hope your recovery is coming along OK
14. hpwatcher said...
M4 lending decreased by £11.6 billion (0.4%) in July. The twelve-month growth rate fell to 1.6% from 2.3% in June.
http://www.bankofengland.co.uk/statistics/m4/2010/jul/provm4.pdf
the charts are worth a look.
I heard a lovely phrase the other day to describe what happened over the past few years...I think it was either ''peak debt'' or ''peak credit''. I'm not sure that attempts to maintain these unusual levels should be seen as maintaining the status quo. Obviously the credit levels could not be maintained, but my point is that a drop is not necessarily deflation - as the levels were so high and so unusual to start with.
15. techieman said...
i dont understand why its obvious that credit levels couldnt be maintained. hindsight is a wonderful thing - i cant remember too many people saying that on the way up - that these levels were "unusual". credit increases are always eventually unsustainable - thats just cycles, but they correlate with economic expansion. Similarly credit contraction correlates with economic contraction. What comes first... aha there is the rub.
Although we can concede that we havent had credit contraction tip us over to M4 contraction.... yet, the M4 lending numbers do speak for themselves. so in spite of a record stimulus the growth rates in M4 has trended down and now credit has contracted... what happens next. Stimulus is over and unlikely to be replaced by anything like the same amounts. i concede that the BoE are unlikely to sell the assets they purchased to the market until things trend the other way, and similarly they are unlikely to tighten for the same reason. But they dont need to for HPC to gather momentum.
"but my point is that a drop is not necessarily deflation - as the levels were so high and so unusual to start with." well thats novel - where did u get that piece of wisdom from? a source would be good! "peak credit" phrase has been around for ages.
16. easybetman said...
@technieman,
Yap, M4 lending is very week. However, this is the natural results of double digit M4 growth for the past 6-7 years or so against a 5%ish nominal GDP growth. It is a bit like if one gets a 20% payrise last year, one shouldn't complain about a 0.5% payrise this year when the company profit only grows by 5%.
Further, I suspect that all lot of capacities are now gone and so there is still too much money chasing after too little goods and services albeit that this purchasing powers' are very unevenly distributed.
If BoE is to pro stability, it must raise the rates now. If it is pro growth, then it should keep / reduce rates further which will result in inflationary redistribution (i.e. rob those little savers to give it to those debtors. The upper class with lots of real assets are OK either way).
Note that the Sell To Renters are beneficial of the past monetary inflation and so if their STR fund got inflated away, there isn't much course of a complain from a moral standpoint (but those who work and save do have a moral case).
17. techieman said...
easybetman - yes if M4 continues to grow.. but the question is will it. a contraction in M4 is deflationary - to use your analogy its actually like having a pay cut from your 20%. once that happens at best you contract consumption, at worse you liquidate assets that you can no longer afford. its measured from where we are. its arguable that the contraction in productive capacity has resulted in a tightening of supply. in some areas you are probably right, but overall i dont think such a contraction has been enough. [i think icarus looked into this a few weeks ago and provided some back up for the latter].
The general point is this - if the contraction in credit is not offset by other means - and i should apologise slightly to hpw - because he didnt say contraction in money supply he just said in credit [ although thats probably going to be about the same going forward], then that results in a contraction in M4 which is deflation. [regardless of CPI which is a consequence of that and lags].
The question really is that if the [hyper]inflationists are right - why hasnt M4 turned and exploded to the upside? Now thats not to say that eventually it wont - but since most of the public see the threat of inflation, and since the public are wrong when they herd against the stats and use anecdotal evidence as of NOW, then i would be surprised if we dont see further contraction first.
Of course that could be wrong, but i am yet to see a convincing argument the other way. Further expansion of the stimulus could make me change my mind but it would have to be massive and would have to involve the purchase of junk debt and be coupled with government spending increases over and beyond what Labour were doing. Alternatively folks could start to increase their debt levels, and lending could increase (over a couple of quarters say).
Anything is possible, but the former is not probable. And the latter not very likely - although more arguable, i agree.
18. Stoatgobbler said...
Why would rates be going up when growth is about to crater, again?
The trade is clearly in selling the futures which show anything other than flat rates.
19. drewster said...
Quiet Guy @ 6 has nailed it. This article exists purely to reassure people: "Don't worry we'll raise interest rates soon and when we do it'll be worth it; so just hold on tight in the meantime". I say judge them by their actions, not their words. How long will the bond markets let them play this game?
20. easybetman said...
@techieman,
Can you send me link to icarus findings? Thanks.
You are of course correct to say M4 contraction will be deflationary - if it is contracted to a level below the real goods and services in the real economy (assuming constant velocity). M4 growth is still +ve so far and I expect a slow/-eve M4 lending growth for the past excesses to catch up. So the 20% pay rise and then the 0.5% payrise will have deflationary effects when prices have fully catch up and exceed these 20% pay rise.
What we seen in the past 10 years or more is the increase of money in the financial economy (e.g. overpriced houses, and also pseudo financial assets like arts etc) but few gets into the real economy (that is why most people who do real work were suffering and it was never easier to make money from money till 2007). When these start to leak though, I fear there isn't enough real value of goods and services to soak up these 'money' and so, we get inflation (nothing hyper of course).
Actually, government spending cut can be inflationary because spending cut means less borrowing and more money in private hands (those non government linked sector) and it depends what they do with the money. I concede that there is a ultra large government sector in the UK so such that spending cut is more likely to be deflationary than not in say 2 years window.
Will have to see how all these factors play out. But the probability of house price down is now pretty high.
I would hedge against hyperinflation though I think that is a very low probability events. Looks like Weimar collapse had a lot to do with the political chaos after the war as well. So without chaos, hyper looks unlikely. There is really only 1 real cause of Hyperinflation, the hyper acceleration of the velocity of the money and that is always a confidence thing.
21. easybetman said...
@technieman - I found the icarus thread (bit inconclusive). Thanks.
http://www.housepricecrash.co.uk/newsblog/2010/08/blog-more-from-nadeem-29850.php
22. hpwatcher said...
i dont understand why its obvious that credit levels couldnt be maintained. hindsight is a wonderful thing - i cant remember too many people saying that on the way up - that these levels were "unusual". credit increases are always eventually unsustainable - thats just cycles, but they correlate with economic expansion. Similarly credit contraction correlates with economic contraction. What comes first... aha there is the rub.
I don't recall electronic money existing on such a scale before, do you?
"but my point is that a drop is not necessarily deflation - as the levels were so high and so unusual to start with." well thats novel - where did u get that piece of wisdom from?
I'll assume that you are being sarcastic in that answer.
23. techieman said...
hpw - there have been credit booms and busts before, its a broken record to keep reverting back to a gold standard to look for answers.
cycles normally get bigger and bigger with time. as for bubbles look at south sea and Mississippi historically.
no - it wasnt sarcastic at all. i corrected the point slightly @15 - 2nd para. keep up :). if you want to explain my error a link would be good. a few weeks ago you were questioning there being a second wave of hpc. (unlike my good self) are you now concurring that there will be? if so its unlikely that would overcome inflationary m4 increases, which is why i have never understood your arguments.
easybet - i just dont agree with a contraction in m4 not resulting in economic contraction - or as above perhaps its vice versa. maybe its enough to just agree that there will be a reduction in nominal hps. after all thats why we are here ;). the last quarter of this year should be interesting! if in the aggregate we hadnt spent the 20% pay rise but saved it, then your point would deserve stronger consideration imo. but we have done the opposite.
as for icarus - no its inconclusive but so is everything. i think its difficult to get numbers for capacity utilisation in the uk but for example, on the larger ticket items we know that retailers are struggling and margins are being squeezed. granted thats demand side and not really cap utilisation and its anecdotal but it shows that there is likely to be spare capacity in some sectors.
This is quite interesting and shows a negative output gap (page 20 has a chart) - looking at it quickly. http://www.hm-treasury.gov.uk/d/inflation_output_gap_uk.pdf .
They conclude:
"The analysis in this paper demonstrates that the level of the output gap has an important role in explaining inflation and suggests that the lagged effect of the large negative output gap will generate significant downward pressure on inflation over the next few years. The analysis also finds strong empirical evidence of the influence of import prices on inflation, with a one-off shock to import prices taking around 1 year to fully feed through to inflation. The paper also investigates
the impact of the change in the output gap on inflation, known as ‘speed limit’ effects, and finds very limited evidence for this effect when output is below trend. The analysis has informed the Treasury’s view on recent inflation developments and underpins judgements on the prospects for inflation."
of course this could turn around quickly, and we know they have been wrong on their estimates of inflation and growth for some time, but it does have a logic to it... unless i have misunderstood your point?
24. hpwatcher said...
hpw - there have been credit booms and busts before, its a broken record to keep reverting back to a gold standard to look for answers.
Sorry, but who said anything about the gold standard? Where did that come from?
a few weeks ago you were questioning there being a second wave of hpc. (unlike my good self) are you now concurring that there will be? if so its unlikely that would overcome inflationary m4 increases, which is why i have never understood your arguments.
I can't see interest rates rising for many years, but I can see additional QE happening - quite soon. At the moment I can't see house prices dropping due to the losses the banks will have to take.
Hope I am wrong, but I just can't see it - unless of course, other forces are brought to bear.
25. techieman said...
"if you want to explain my error a link would be good. " so assume you cant then. where did the gold standard come from? well you always go on about credit creation being limited previously because of the gold standard. thats where it came from. if i have got that wrong then feel free to explain what you mean.
"I can't see interest rates rising for many years, but I can see additional QE happening - quite soon." i have never said [BoE] irs will rise - i have said they wouldnt rise as quickly as people think, but i agree i doubt if they will rise significantly soon, but i dont think anyone can say "for many years". i cant understand how you can believe in inflation and hyperinflation soon - and think that rates wouldnt be raised to combat that. of course a deflationary environment "requires" based on the current mpc view, zirp. As for QE - they have the ability in place from jan 2011 to buy junk for pounds. if (and its a big if) they actually do that then i think the (hyper)inflation will be one step - well probably three steps - nearer.
as for banks taking losses - its people that buy and sell houses not banks. the only thing banks can do is to cut their exposure to losses from res property - which is of course what they have been doing re LTVs, income multiples SVRs [punters pay the svr rate or a fixed rate not a boe base - and as for trackers, they have al but disappeared] and big arrangement fees. that is ensure that the punter has more of the risk. what is the difference between banks here and banks in the US and banks in japan? i dont get that - perhaps i am just naive?
26. hpwatcher said...
"if you want to explain my error a link would be good. " so assume you cant then. where did the gold standard come from? well you always go on about credit creation being limited previously because of the gold standard. thats where it came from. if i have got that wrong then feel free to explain what you mean.
Have you been on the whisky this afternoon?
27. braindeed said...
EBM@14 said....
Note that the Sell To Renters are beneficial of the past monetary inflation and so if their STR fund got inflated away, there isn't much course of a complain from a moral standpoint (but those who work and save do have a moral case).
Same should be said of
lots
of savers, Bloomers, Pension Pot Accumulators.....we all need to take some sort of 'haircut', but as i'vNote that the Sell To Renters are beneficial of the past monetary inflation and so if their STR fund got inflated away, there isn't much course of a complain from a moral standpoint (but those who work and save do have a moral case).e said many times - we'reall
VI's now, and no-one seems prepared to give up a slice of their pie.PS ...don't choke on the dentures, Grumps.
28. braindeed said...
oops
29. hpwatcher said...
I am just trying to make sense of what you have written.
well you always go on about credit creation being limited previously because of the gold standard. thats where it came from. if i have got that wrong then feel free to explain what you mean.
It was limited, but not prohibited.
i have never said [BoE] irs will rise - i have said they wouldnt rise as quickly as people think, but i agree i doubt if they will rise significantly soon, but i dont think anyone can say "for many years". i cant understand how you can believe in inflation and hyperinflation soon -
I don't think interest rates will rise and there will be a lot of inflation - not hyperinflation - what's difficult to understand about that? I don't recally saying there was going to be ''hyperinflation'' but I can see very significant inflation happening now.
as for banks taking losses - its people that buy and sell houses not banks.
What happens when people declare themselves bankrupt and just walk away? Who do you think picks up the bill?
30. techieman said...
as for banks taking losses - its people that buy and sell houses not banks.
What happens when people declare themselves bankrupt and just walk away? Who do you think picks up the bill?
- fair comment - which is why they are putting in place those items i allude to above. As for current nequity, its unlikely there is going to be wholescale bankruptcies beyond that they have already endured. sure they will lose money but not all their money - not from the uk market at least. if you were right there wouldnt have been such big falls in the us - thats where the banks have more exposure- CDO etc. the points you answer are as always selective. shame really.
i didnt say prohibited - i said limited!!!
No whisky just morphine! what the f*ck are you taking that turns limited into prohbited? and can i have some please ! i am off out now - enjoy the rest of the day - and it might be an idea to read what the treasury says [my link] to get an idea as to why they are formulating policy the way they are.... [sorry they dont do they - thats the mpc].
31. jack c said...
I see it's handbags at 20 paces again !
32. hpwatcher said...
sure they will lose money but not all their money
Who said the banks will lose all their money?
its unlikely there is going to be wholescale bankruptcies beyond that they have already endured. sure they will lose money but not all their money - not from the uk market at least
And the government cuts? I feel they will have a highly significant part to play in the economy.
i didnt say prohibited - i said limited!!!
It's a money creation under the gold standard thing.
33. titaniccaptain said...
@HPW and Techie.....what a handsome couple....argue like husband and wife............
There is only one logical outcome of this......
Do you HPW take Techie to have and to hold and argue about inflation even though you may be wrong?
Do you Techie take HPW and promise to honour and obey him and liquidate all your assets in favour of Gold regardless of your better judgement till death do you part?
Repeat after me.....With this Gold Ring.................Hang on!!!!...............................where's the gold ring? OH NO the best man was S2R1 and he has sold it for a silver one.
34. titaniccaptain said...
The tittle of the above posted you tube video 'Organ Duet' sounds about right gnarf gnarf
35. techieman said...
TC just back - im actually not sure if he really doesnt understand the points made or if he really thinks he is responding coherently and without contradiction. Example - we will have public service cuts that will effect [contract] the real economy and he argues create more bankruptcies than i think there will be, and yet those wont call HPs to fall and inflation will nonetheless be rampant. its really a bit of a wast e of time continuing any discussion - yes TC i should know better :).
Easybet on the other hand makes some coherent and fair points.
"Do you HPW take Techie to have and to hold and argue about inflation even though you may be wrong? " - nope cause he cant be wrong about that. Thats his raison d'etre.
"Do you Techie take HPW and promise to honour and obey him and liquidate all your assets in favour of Gold regardless of your better judgement " nope cause ive made the lions share of the amount i was going to make in gold, and aint buying no more than the insurance holding i still have. [insurance inasmuch as if i am wrong].
Marriage??- time for a haitian divorce babs:
36. titaniccaptain said...
@Techie....
Excellent come back, bravo......but what of your silent bride?
37. techieman said...
[takes a bow] hes lying (or is that lieing) in the arms of mary.....
i just read through and this kind of thing is really childish:
" i cant understand how you can believe in inflation and hyperinflation soon - and think that rates wouldnt be raised to combat that. of course a deflationary environment "requires" based on the current mpc view, zirp."
so that sentence (whether thats his view or not) has to be read as a whole sentence.
his response is he takes only the first piece of the sentence and responds to that:
"i cant understand how you can believe in inflation and hyperinflation soon -..." I don't think interest rates will rise and there will be a lot of inflation - not hyperinflation - what's difficult to understand about that? "
the case rests...
38. mr g said...
@Braindeed
I don't wear dentures, I still have my own teeth thanks!!
39. hpwatcher said...
TC just back - im actually not sure if he really doesnt understand the points made or if he really thinks he is responding coherently and without contradiction. Example - we will have public service cuts that will effect [contract] the real economy and he argues create more bankruptcies than i think there will be, and yet those wont call HPs to fall and inflation will nonetheless be rampant. its really a bit of a wast e of time continuing any discussion - yes TC i should know better :).
The world isn't black and white - as much as you'd like to think it is.It's perfectly possibly to see different things happening in different sectors. Over the past year, house prices haven't fallen much, but I know of many, many who have lost their jobs.
Now here is a classic techieman:-
" i cant understand how you can believe in inflation and hyperinflation soon - and think that rates wouldnt be raised to combat that. of course a deflationary environment "requires" based on the current mpc view, zirp."
so that sentence (whether thats his view or not) has to be read as a whole sentence.
Um, actually you wrote ALL of that. So now you are arguing with yourself?
Another example of you putting words into the mouths of others. I would advise taking less of the pills and/ wacky bacci and going to have a lie down for a few hours. I could write about how there is already quite severe inflation, and how BOE has chosen not to do anything about it, and probably won't for a good while....but I can't be ar*ed.
techieman, same trick everytime; you distort arguments of others and put words into their mouths. Not big, and definitely not clever.
40. Crunchy said...
36. hpwatcher said...techieman, same trick everytime; you distort arguments of others and put words into their mouths. Not big, and definitely not clever.
From a straight talker. Good man hp. Thank goodness I can switch him off when the nausea of hedging sets in. :)
41. techieman said...
do i? i think you are the only one that thinks that. you can write what you like . thats true. eaybetman raised the issue of tight capacity and the output gap. if you took a look at the chart from the treasury paper and opened yr eyes you might understand why they have the zirp policy. then again....
my point was - and if will say it s-l-o-w-l-y:
1. if you believe in lots of inflation - ok lets say 10%
2. and if you believe that if there is any threat of deflation they will reflate.
3. then i cant understand why u think they wouldnt raise rates for many years.
4. given that would be the policy.
5. yes of course i concede there has been lots of reflation and zirp, which as i said is why i said there would be a DCB. i cant recall you having any worthwhile input re that.
6. i concede that the stubbornness of inflation has surprised me - thats also true. BUT i did say that it wouldnt be a surpise to see cpi growth reduce - which it did - albeit i expected it to dip under 3%.
7. as for lots of inflation now, the boe has not done anything about it BECAUSE of amoung other things the output gap. although you and paul automatically assume its to f*ck savers and reward debtors. maybe thats part of the reason - i.e. political but not the whole reason.
42. techieman said...
ok if inflation goes to 10%, (which you seem to believe) then do you or do you not think they would raise rates? if so then either you believe the rise wont happen for "many years" or you dont believe they will use monetary policy to control inflation.
either way if you think we are going to have inflation of 10% in the next year then how can they hold rates at approx zero for "many years".
Im just asking you a question cause it makes no sense to me!
43. hpwatcher said...
ok if inflation goes to 10%, (which you seem to believe) then do you or do you not think they would raise rates? if so then either you believe the rise wont happen for "many years" or you dont believe they will use monetary policy to control inflation.
Inflation is pretty high already, I am seeing big rises in my line of business - more like 25% for some things - bought any salmon recently? But BOE is still keeping interest rates low, and will probably continue to do so. I can also see more QE to keep interest rates low, if it looks like the ''recovery'' isn't going to continue - regardless of inflation.
I don't like it any more than you do, I would love to get a decent rate for my savings, but I just don't see it.
44. techieman said...
i dont eat salmon :).
ok fair enough hpw, if that is what you see and think then who am i to argue. If the CPI measure ratches up to about 6% then i am sure they will raise rates, but i cant see that happening.
now whether the cpi actually reflects price increases properly - is a different argument. At least on that basis i agree with you that it doesnt. We all have our own inflation indices so personally for me and what i buy its pretty much the same as last year. Having said that i do have a very strange diet!!!
as for caring whether or not the raise the rates - i actually dont care so long as we see the HPC mark 2 -which i think we will, so i am quite relaxed. Granted i am i a very fortunate position though.
45. hpwatcher said...
i actually dont care so long as we see the HPC mark 2 -which i think we will, so i am quite relaxed. Granted i am i a very fortunate position though.
I don't know, but a HPC may bring a lot of other things with it - the the UK economy now depends so much on high house prices - which could be pretty bad for most.
46. Crunchy said...
41. techieman said...do i? i think you are the only 'one' that thinks that.
Love it! You have redeemed yourself. lol