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Tired of Waiting

Boe Rates Forecasts - Economic Survey

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BoE Rates Forecasts - Economic Survey

Best one, IMHO :

Ross Walker, UK Economist, RBS

Our forecast remains for the first Bank Rate hike in November 2010. The logic underpinning Mervyn King’s comments at the May Inflation Report press conference – that the merits of pre-emptive action outweigh the costs – is equally applicable to monetary policy. Against a backdrop of above-target/above-forecast inflation, a depreciated currency and sustained growth, several early Bank Rate rises might prove to be an effective way to cement the UK’s anti-inflation credentials. If policymakers are trying to ensure interest rates are ‘lower for longer’ over the medium-term – in order to facilitate the process of balance sheet repair – then, ironically, the best way of securing this might be via some modest pre-emptive Bank Rate rises. We look for Bank Rate to reach 1.0pc by end-2010/Q1 2011 and climb modestly to 2.5pc by end-2011.

http://www.telegraph.co.uk/finance/financetopics/budget/7810269/Economists-survey-of-the-UK-when-will-the-Bank-start-raising-interest-rates-and-how-high-will-they-go.html

Edited by Tired of Waiting

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Yes IF the £ is not attacked & CRUSHED ....................then they have little choice but +5% rates (Rubs hands with glee).

Mike

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Unless the cuts are worse than expected, peoples spending power reduces, and so consumer demand subduing prices.

I'm hoping for massive cuts and a rate rise :D

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Yes IF the £ is not attacked & CRUSHED ....................then they have little choice but +5% rates (Rubs hands with glee).

Mike

Currencies are attacked only when they are vulnerable. The current government is saying the right things (spending cuts), and strengthening the pound. The "market" (our lenders) will wait until the Budget, and if it is a sensible one, the £ will be fine.

On a different topic, one of the opinions in the Telegraph was a bit strange. This guy talks more like an astrologer than an economist. Take a look:

Andrew Lilico, Policy Exchange

They will loosen policy further, with more QE - perhaps another £200bn - to accompany the fiscal consolidation. QE will coincide with rising interest rates. The first phase will return us to 2pc. That will begin early next year (unless the euro collapses or the US falls into serious deflation in the second recessionary dip coming there). They will stay at around 2pc throughout 2011 despite the very aggressive boom we will have (with quarterly growth perhaps reaching 1.3pc late in 2011). As inflation spikes up in 2012, the brakes will then need to be applied very aggressively. I hope they will consider the economy robust enough to tolerate interest rates of 8-10pc in late 2012. (If they do not, then that will imply that inflation might exceed 20pc at peak (cf the 1970s) instead of the 10pc-ish peak I hope for, and interest rates will not be aggressively raised until six months to a year later.) Obviously there will be another recession, then, in 2013 or 2014.

Edited by Tired of Waiting

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Unless the cuts are worse than expected, peoples spending power reduces, and so consumer demand subduing prices.

I'm hoping for massive cuts and a rate rise :D

The government is coordinating the cuts with the BoE.

We will have either massive cuts, or rate rises. Not both.

Or some of each.

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Yes IF the £ is not attacked & CRUSHED ....................then they have little choice but +5% rates (Rubs hands with glee).

Mike

If the £ falls a little, it may be a little inflationary, and the BoE may be under some pressure to increase rates. But they may argue again that this is only a one-off, short term factor, and delay the rates increase.

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Unless the cuts are worse than expected, peoples spending power reduces, and so consumer demand subduing prices.

I'm hoping for massive cuts and a rate rise :D

And house prices that fall low enough to be financed through (reduced) unemployment benefits. Unless the destruction of public sector pensions boosts btl of course. :lol:

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And house prices that fall low enough to be financed through (reduced) unemployment benefits. Unless the destruction of public sector pensions boosts btl of course. :lol:

Do you mean that public sector employees, worried about their future, will start to invest in properties now? Or in the near future?

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  • 225 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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