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Boe Should Have Had Higher Rates........sez The Boe

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Barker now admits that it may have been a mistake not to raise rates in a year when house prices kept rising and consumers were taking advantage of affordable credit to increase their borrowings.

Yeah hindsight's a wonderful thing. Very helpful :rolleyes:

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300k salary plus bonus is not enough...we need better people in the BoE

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Yeah hindsight's a wonderful thing. Very helpful :rolleyes:

Maybe they should make up for their mistake by raising rates now - inflation is above target after all.

I should think a base rate of ~4% would be enough to have the desired effect.

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Maybe they should make up for their mistake by raising rates now - inflation is above target after all.

I should think a base rate of ~4% would be enough to have the desired effect.

why raise rates to recapitalise banks when they can give it to them for free?

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So not only were the amateur economists on here right, we were right for the right reasons.

Yes but the BOE is telling us that NOW they know what they are doing, and therefore we should trust their decision to keep rates low.

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Don't worry guys, everybody knows the solution to a problem caused by low interest rates is, er, low interest rates.

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So not only were the amateur economists on here right, we were right for the right reasons.

Amazing the arrogance of the professionals, I know better because I get paid to do this.

The herd mentality is quite frightening.

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If they couldn't magic money out of thin air, that would prevent this shit. The BoE will never be able to set rates correctly to offer stability in this way, or very rarely. If you've ever controlled say a boat or a plane, you'll know what I mean by "over-pegging" - over correcting one way, then over correcting another. The BoE has a control system with terrible feedback that is littered with counter-productive motivations. They can't even agree where they should be going, let alone see where they're going, let alone know what inputs to put in (assuming they always have the best interests of the majority of the population at heart of course, rather than preservation of the banking cartel (cough) I mean system..)

I would prefer a hard-backed currency, where the BoE acts more like a market-maker in terms of credit, with a large store of wealth (but limited wealth) that can be lent into downturns, against the flow of the market. Otherwise, the market should dictate. This would offer a self-governing system with "stabilisers".

Edited by Fraccy

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Yes but the BOE is telling us that NOW they know what they are doing, and therefore we should trust their decision to keep rates low.

laugh.gif oh please stop it! enough already! laugh.giflaugh.giflaugh.gif

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300k salary plus bonus is not enough...we need better people in the BoE

Are you sure the same people don't just need a pay rise in order to fulfil their potential? They simply are not valued high enough: it is a drag on their productivity.

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Is this an economist explaining the past?

What we want is for them to turn round and err on the side of inflationary caution.

Hould have seen Danny boy on BBC News around 16:40, he was saying this £6bn rationalisation will send us back into recession :blink:

Multiply it by 10 and I'd hope he could be right.

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Guest sillybear2

Maybe they should make up for their mistake by raising rates now - inflation is above target after all.

It's not, the inflation report from May 2009 says inflation in May 2010 is under control. B)

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Well don't forget that Gordons clever trick with taking houses out of Inflation prevented them from raising rates.

I don't excuse them for their lack of integrity, but I do know who engineered the situation where the rates stayed low even as HPI was soaring.

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Well don't forget that Gordons clever trick with taking houses out of Inflation prevented them from raising rates.

I don't excuse them for their lack of integrity, but I do know who engineered the situation where the rates stayed low even as HPI was soaring.

the only thing pushing up house prices was lending and confidence of the market, the base rate didnt really have an affect on houseprices because it wasnt calculated into the basket, so rates were low.

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  • 145 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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