Mpc: How Would You Vote?

[Jason]

Ok, thought I would start a poll on interest rates. How would you vote if you were part of the MPC in August?

Lets keep wishful thinking out of this!

[FTBagain]

If I was on the MPC I would vote for a hold (as I did here) because the data is still very mixed.

However, I would like to see a cut! Why? Easy the narrower the gap between UK rates and US rates, the greater the downward pressure on the Pound. If the pound falls we import inflation. Import inflation rates go up. Rates go up HPC!!

Oil is the key. Oil prices are up massively over the last two years, but petrol prices over here have not risen anywhere like as much. True we pay a lot of tax up even so petrol prices should have gone up. They have not because the pound has been strong over the same period, all but cancelling out the rise in oil prices.

If the pound falls now we will be exposed to the full price of oil and it could happen quite quickly. I have noticed that petrol prices are at last starting to rise, 5p in the last three weeks or so.

[Guest growl]

I voted for a small rise. Only because I know some people who are still using debt to fund their spending. Not via credit cards but remortgaging. They are not spending in the shops but doing up their houses, (and their houses don't really need it). They live up in the North West. They are the type of people that don't watch the business news or take an interest in economics.

This is the problem. There are still a huge amount of people out there that are digging themselves into more debt, and there is no incentive for people to save. Not that I think these type of people would save anyway, but at least a slight interest rate rise might just do the trick and stop them in their tracks.

Now I know that a rise would really hurt some people. But how many times can you tell people not to get into more debt. The information is out there and has been for a long time. What really annoys me is that it will be either the third or fourth remortgage, and this will add to the figures that VI use to say that there have been more mortgage approvals, thus the housing market is still healthy.

I despair at some people.

[AgeingBabyBoomer]

^^ agree with that.

I wouldn't mind seeing a rise, because so many of the banks, EAs and RICS etc

are almost banking on it. (Even though it won't save them)

Voted for hold though

ABB

[Jason]

I voted for no change. Why? Because if rates went up house prices would slide much faster, which in turn would bring down the economy.

If rates went down, it would lead to higher inflation (already mentioned) but all it would do is delay the inevitable, making a HPC more servere.

If it were for my own benefit I would say rise. Why? Because I have savings which will grow, and a HPC would be over more quickly.

Or maybe a cut would be a blessing in disguise? It would give a boost to the Housing Market, but when there is a rate rise it would be more of a shock??

... really, I don't have a clue, and neither does the MPC (hence, no change).

[Guest growl]

I have noticed that petrol prices are at last starting to rise, 5p in the last three weeks or so.

<{POST_SNAPBACK}>

Out of interest what was your local charging at the pump. And are you in the south or midlands or north.

Only because I felt like I had paid more yesterday. But was in a rush so didn't check the price.

[Kam]

If the pound falls now we will be exposed to the full price of oil and it could happen quite quickly. I have noticed that petrol prices are at last starting to rise, 5p in the last three weeks or so.

<{POST_SNAPBACK}>

I've seen more in south london

Diesel now at 93.9p was around 86.9p last month

at that rate we'll be at £1 soon

[Guest wrongmove]

Maybe this should be a separate thread, but in E. Mids. unleaded 86.9, up from maybe 82.9 in last few weeks. You can pay up to 95.9 for unleaded if you don't shop around though !

[mhifoe]

Maybe this should be a separate thread, but in E. Mids. unleaded 86.9, up from maybe 82.9 in last few weeks. You can pay up to 95.9 for unleaded if you don't shop around though !

<{POST_SNAPBACK}>

Many of the petrol stations near me have been replacing the price display boards on their forecourts this month. The new ones have extra space for when the price exceeds £1.00 a litre. I think my next car might have an engine size under 2 litres.

[FTBagain]

I am in the Bath Bristol area. Prices are (average) unleaded - 87p, Diesel 90p.

Many of the petrol stations near me have been replacing the price display boards on their forecourts this month. The new ones have extra space for when the price exceeds £1.00 a litre.

I've noticed this around here, but I have not been looking either. I will look out for new boards for now on.

[north/south divide]

I am in the Bath Bristol area. Prices are (average) unleaded - 87p, Diesel 90p.

I've noticed this around here, but I have not been looking either. I will look out for new boards for now on.

<{POST_SNAPBACK}>

I'm from south cheshire and we really must be paying the highest fuel prices (apart from London) in the UK.

Petrol has been hovering about 86.9p but now its gone up to a ridiculous 89.9 in most supermarket forecourts. Esso is charging 92.9p ...

Something seriously wrong here. This used to be a very cheap place to live, but houses have rocketed unprecedentedly and now this fuel hike. So much for the north being cheap.

Edited July 31, 2005 by north/south divide

[the end is a bit nigher]

I'm from south cheshire and we really must be paying the highest fuel prices (apart from London) in the UK.

Petrol has been hovering about 86.9p but now its gone up to a ridiculous 89.9 in most supermarket forecourts.  Esso is charging 92.9p ...

Something seriously wrong here.  This used to be a very cheap place to live, but houses have rocketed unprecedentedly and now this fuel hike.  So much for the north being cheap.

<{POST_SNAPBACK}>

don't worry, house prices will be back to normal soon

diesel in harrogate area 92.9p

voted for .25% increase to keep inflation down NOW, rather than having to whack it up 1% in a years time when it is too late

the problem with the inflation target is that the 2 year aim is 2% - this is fine, but on a rolling basis we never get 2 years ahead do we! - 4 months ago inflation was expected to be 1.6%, it is currently 2% i.e. above forecast - stamp on it now (and reward savers into the bargain)

[laurejon]

I voted for a cut, the reason is simple.

I intend to revisit the market post crash and make a killing a soft landing is no good to me.

A cut will also be a double edged sword, it will make sure that the public see the MPC as puppets of the Government, and will ensure the Government take the blame for the mismanagement of our economy that was in the black with billions in surplus when they took over from the tories.

Labour should go back to what they are good at, reading the Sun and thinking of who to vote out on Big Brother.

[VacantPossession]

Global interest rates have been aritficially too low for too long. The long term effect has been disastrous.....the result being that everyone has taken cash out of productivity and put it into property. Property by itself never improves an economy per se....merely encourages people to think they have more than they actually do, and is in the end inflationary.

I would vote off the scale. A 2 percent rise please, over three months if you like. half a percent in either direction might affect temporary "sentiment" whatever that means, but won't make any difference in practice.

This is not unrealistic. Lowering them just puts off the inevitable and they'd only go back up again within a month or two.

VP

Edited July 31, 2005 by VacantPossession

[FaTB]

I voted for no change. Why? Because if rates went up house prices would slide much faster, which in turn would bring down the economy.

If rates went down, it would lead to higher inflation (already mentioned) but all it would do is delay the inevitable, making a HPC more servere.

If it were for my own benefit I would say rise. Why? Because I have savings which will grow, and a HPC would be over more quickly. 

Or maybe a cut would be a blessing in disguise? It would give a boost to the Housing Market, but when there is a rate rise it would be more of a shock??

... really, I don't have a clue, and neither does the MPC (hence, no change).

<{POST_SNAPBACK}>

I also voted for no change.

Would love to see House prices come down, but not the economy with it, although i think its probably too late for both already.

I also have no desire to see other potential and less financially aware FTB's getting into financial difficulties in the future, if they are lured in by an IR cut, thinking it is going to be the ongoing trend.

[numbersix]

I would vote for a small increase as the U.S. interest rates are continuing to rise and the gap has narrowed considerably with the U.S. figure in the last three years.

The increase in petrol prices here will lead to higer transport costs here which will increase food prices and inflation should increase hence my wanting a small rate rise now.

However I think the MPC will be more cautious and keep rates the same.

[Guest Charlie The Tramp]

A hold this week is a sure sign that rates will be heading one way in the future and that is up. If the big three King, Large, and Lomax vote again to hold this month then they are definitely on the way up.

The fools are about to get screwed.

[Bagehot]

I dont think it will matter too much if IR fall by 0.25%. I dont think the housing market will truly take a hit until there is a shock to the economy. In the absence of a smoking gun shock, I suspect the shock will come when people realise that the economy is no longer expanding. When the first reports of negative economy growth are made and the Chancellor has to increase taxes in March 2007/08...then we will have the shock and awe that we need for the housing market to go down. Alternatively, those poeple who HAVE to sell, will strat taking lower offers in the latter part of this year. This will show prices falling and even the uninformed buyers will realise that they have the upper hand.

However, I think we, the bears, may now need to wait until late 2006 now with the optimal buying opportunity arising from mid 2007 onwards. Bring it on.