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Boe Starts To Talk About Rates

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Bank of England inflation hawk Andrew Sentance said policymakers should start raising interest rates because economic conditions were improving but any increase should occur only gradually.

0.001% per month? :rolleyes:

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China cuts Western debt............you need money....Asia has it........but your going to print....so they DEMAND higher rates.

BOE knows this, thus the "new" FSA rules to de-lerage the house prices ahead of higher rates!

Mike

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I believe inflation is trending down, but reality is its still over 3% in the UK. I believe inflation will come down well under 2% once we get some yoy comparisons with stronger months in the fall of 2009, and as house prices continue falling.

But if it doesn't then the BoE has a mandate to keep inflation ~2%, so it should move to tighten. There are lots of ways to tighten besides rates, like the limiting of leverage people can take on housing. And regulations for reserves on banks.

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I believe inflation is trending down, but reality is its still over 3% in the UK. I believe inflation will come down well under 2% once we get some yoy comparisons with stronger months in the fall of 2009, and as house prices continue falling.

But if it doesn't then the BoE has a mandate to keep inflation ~2%, so it should move to tighten. There are lots of ways to tighten besides rates, like the limiting of leverage people can take on housing. And regulations for reserves on banks.

Inflation has been over target for quite a long time already and the BOE have not raised rates. They are either lying to us or themselves (or both) about something. Whichever, I dont see inflation being over target as causing them to raise rates.

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Sentance might be a friend of we people on HPC but he is another dullard IMO. He talks of "private sector upward wage demands" as having an effect on inflation. Therefore he is an idiot and not suited to be in a position to make forecasts. Next.

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I believe inflation is trending down, but reality is its still over 3% in the UK. I believe inflation will come down well under 2% once we get some yoy comparisons with stronger months in the fall of 2009, and as house prices continue falling.

But if it doesn't then the BoE has a mandate to keep inflation ~2%, so it should move to tighten. There are lots of ways to tighten besides rates, like the limiting of leverage people can take on housing. And regulations for reserves on banks.

What is the required real BoE rate required to keep inflation roughly stable? I had always thought that it was in the region of 2%. I also thought that real rates of 3% are required to bring about moderate decreases in the rate of inflation.

With current inflation at 3% and a target of 2%, shouldn't the Bank Rate be at 6% with scope to reduce it to 4% over time once inflation creeps back towards its target?

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They are trying to take some heat out of the market by re-anchoring expectations on higher rates.

They are also way behind the curve.

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What is the required real BoE rate required to keep inflation roughly stable? I had always thought that it was in the region of 2%. I also thought that real rates of 3% are required to bring about moderate decreases in the rate of inflation.

With current inflation at 3% and a target of 2%, shouldn't the Bank Rate be at 6% with scope to reduce it to 4% over time once inflation creeps back towards its target?

inflation should be 0.

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As usual people on here have missed the point.

The BoE don't set rates anymore, the banks have diverged from the BoE rate.

The BoE got a couple of years out of screwing savers to pay debtors, mostly thanks to fixed term contract linked to BoE rates, but now the economy has adjusted.

it like if the government doubled tax on fuel to help fund Housing Benefit.

2 years later people will have swapped to move fuel efficient cars or simple reprogrammed the ECU to improve fuel economy at the expense of performance.

Edited by TaxAbuserOfTheWeek

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It's nice that he wants to raise rates but I think he is a bit of a rogue on the mpc. I doubt anyone joined him in his vote last month. Let's see what David miles says when he speaks on Thursday.

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  • 149 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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