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mustrum_ridcully

Boe + Mpc Blair And Browns' Scapegoat

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As a lot of other posters here I've thinking about the MPC and the next interest rate meeting and can't help feeling I wouldn't want to be in their shoes.

At this stage I can't help but think that there is no way out of the impending econmic problems - in otherwords the BoE have been left in a position where they can't do anything.

If Brown and Blair (B&B) had actually been doing their jobs properly all the BoE would worry about is controling inflation - the job they've been tasked with. But lets be honest B&B haven't, B&B borrowed the country out of trouble for a short time (influenced the MPC to acheive this), instead of doing the stuff that really helps build real jobs (not stacking shelves).

The MPC have basically been left with 3 bad choices:

1 - IRs go down - helps business (hey isn't the government supposed to deal with this) in the short term through borrowing (theirs and consumers) and favourable exchange rates, but imports go up so inflation goes up so IRs go up so wages go up so hurting the economy.

2 - IRs go up - strengthens £ helping control inflation but hurts company exports, increases repayments for companies and people go up with all the ensuing problems. Less borrowing so less money going into the economy so hurting business.

3 - IRs stay the same - inflation keeps going up, companies and people go bankrupt - a mixutre of 1 & 2. Probably the least worst option of the 3.

Economy screws up and B&B turn around and say it's the BoEs job to set IRs and they had them too low then too high then didn't drop them fast enough blah blah blah.

So I can't help but think that in back of B&Bs minds was the though, "give the IR stuff to the BoE, so if things go wrong we can blame them and if things go right we can say how wise we were to give them the 'power' and how well we managed everything". Wonder what everything would be like now if the BoE and MPC had really been allowed to get on with their job without politacl meddling - Mervyn King seems to have some grasp on what's going on.

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Which is why i believe a hold might be on the cards tommorow. Dont like the way the cut has been priced into everything at the moments, the MPC dosnt like to shock the markets but they dont like being dictated to by the market makers either.

A hold would be sensible, a cut predictable, a rise .. well

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Which is why i believe a hold might be on the cards tommorow. Dont like the way the cut has been priced into everything at the moments, the MPC dosnt like to shock the markets but they dont like being dictated to by the market makers either.

A hold would be sensible, a cut predictable, a rise .. well

Sterling has been fairly strong recently. Looks like a hold to me. As the ECB likes to say

"Rates are appropriate..."

Edited by gone west

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Guest Riser

News today that Blair does not want to remain an MP once he hands over the reigns to Gordon Clown. Typical Teflon Blair, he knows the Sh!t will hit the fan and he doesn't want that to impact on the fees he will get on the after dinner circuit, after all he will need all he can get to pay off the negative equity on his house in London B)

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  • 335 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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