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Can A Governor Of The Bank Of England Keep The Job For As Long As They Want?

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According to the Bank of England's site their remit is to low inflation, promote trust in banknotes and a stable financial system. It goes on:

"What your money is worth depends on the prices you pay for things. Rising prices reduce the value of money – your money buys less."

"It’s the Bank’s job to maintain the value of money by keeping the rate of inflation at a low level."

http://www.bankofengland.co.uk/about/pdfs/whatthebankdoes1.pdf

Well I'm sorry but I don't think Mervyn King has managed any part of their remit.

I don't know if he was off sick before Northern Rock collapsed and the whole banking system nearly followed it shortly after but he is certainly at work now. Rather than promoting trust in our banknotes he seems to trash sterling at every opportunity and this leads to inflation. This morning my partner guessed the Asda bill would be £93 but it was £118!! She has never been as much as £25 short before. I don't think Mervyn is any good at inflation targetting at all. With interest rates at 0.5% and RPI at 5% hasn't he aided and abetted bankers to steal saver's money? Our main banks have just made £13bn some of that used to be our income!

Surely it's time someone said to Mervyn "Look Merv you are a nice chap but don't you think it's time you let someone younger try this inflation targetting thing?". After all they are already talking of rising food prices and VAT in the new year but I'm not sure Mervyn King has heard about it yet.

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They seem to change roughly every 10 years.. giving Mervyn another 3 years ish.

I doubt the change of governor would have quite the effect you might hope for. For a reason I don't even understand myself I actually have quite a lot of faith in him (even if his forecasting has been.. slightly inaccurate :lol: )

Some of it (like the GDP figures I think they just have to do. They couldn't predict a drop, otherwise it would have be a self for-filling prophecy. They had to keep saying the right thing even though they probably knew at the time they were lying out of their back teeth. The same probably goes for inflation.. but Mervyn is obviously more concerned about a second dip.

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Some King goes and some other crook takes charge, difference much?

When was the last time we had -4.5%? (Base rate 0.5% - RPI 5%). Given that I'll take my chances on your "other crook" if someone can arrange it. There is no need to check their experience or qualifications too deeply - I'll chance anyone who can pass a simple maths test.

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...they will soon review their CPI forecast. I believe to about 3.5%, maybe 4. If inflation spikes to 5 this year or higher....they will just review their forecast again. I don't care about Mervrin, I just want them to sort out this mess.

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I don't know if he was off sick before Northern Rock collapsed and the whole banking system nearly followed it shortly after but he is certainly at work now.

....in Northern Rock's glory days Banking Supervision was in the capable hands of the FSA....as for inflation IRs were the control mechanism of choice in the past ....it depends how many of the Nuliebour types are removed from the IR committee and how committed the Coalition are to maintaining low rates.... :rolleyes:

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....in Northern Rock's glory days Banking Supervision was in the capable hands of the FSA....as for inflation IRs were the control mechanism of choice in the past ....it depends how many of the Nuliebour types are removed from the IR committee and how committed the Coalition are to maintaining low rates.... rolleyes.gif

In October 2009 after Halifax reported a house price rise of 1.6% I sent this to Hector Sants at the FSA:

Given that the FSA stood aside and did nothing to try prevent the last house price bubble, e.g. the failure to regulate Northern Rock and their infamous 100%+ mortgages, are you at all concerned about the recent increase in house prices? Does the FSA think it's business as usual and let's have another unsustainable asset bubble on top of the last one?

The lack of regulation regarding Northern Rock obviously played a part in the house price rises.

I received this reply which seems to be the FSA blaming the B of E.

The more general question of asset price bubbles is of course of interest to the FSA but as I am sure you realise we are essentially a micro prudential regulator. Macro prudential oversight is primarily the responsibility of the Bank of England

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Their new remit is to subsidise house prices, whatever the cost. It was mentioned in the QE pamphlet.

:lol::huh: :angry:

It's absolutely tragic that we have an economy built and dependent upon ever increasing house prices. A Ponzi economy where debt is wealth, only it isn't.

Our debt is like quick sand, whilst those countries that produce wealth will probably be able to navigate the dangerous sandbanks. (Just watched 'Coast' on Morecambe Bay :lol:)

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  • 224 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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