Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Gloomy Outlook Expected From Bank Of England

Recommended Posts

http://www.telegraph.co.uk/finance/economics/7933403/Gloomy-outlook-expected-from-Bank-of-England.html

The Bank's August Inflation Report, to be published on Wednesday, will show that the Monetary Policy Committee (MPC) will fail to meet its remit of 2pc inflation for much of next year. In its May report the Bank predicted inflation would fall back to target in 2011.

The Bank is also expected to lower its May forecasts for growth of 3.2pc next year and 3.4pc in 2012, to take into account the impact of the austerity measures of the emergency Budget, a renewed credit squeeze, and the risks posed to the domestic economy by a potential slowdown in the US and eurozone – Britain's biggest export markets.

It is likely to bring its forecasts closer in line with a consensus expectation for 2.1pc growth in 2011 and 2.4pc in 2012.

Britain's official measure of inflation, the Consumer Prices Index (CPI), has been above the 2pc target for much of the past four years, and above 3pc since the beginning of the year.

Annual CPI inflation was 3.2pc in June according to the latest available data from the Office for National Statistics.

The last quarterly report was published in May, before the coalition said it would raise VAT to 20pc in January 2011, a measure that will inevitably push inflation higher than the Bank previously thought.

"This means that any fall in CPI inflation during the rest of this year is likely to be temporary, and our expectation is that inflation will remain well above target until 2012," said Simon Hayes, economist at Barclays Capital. "The projected persistence of above-target inflation will heighten concerns about inflation expectations, which have already risen on some measures."

The fear is that markets and the broader public could start to lose faith in the Bank's ability to control inflation, prompting persistent expectations of high inflation which could push wage growth up.

"The MPC is increasingly aware of, and somewhat embarrassed by, the persistence of above-target inflation and will likely direct a good portion of its rhetoric toward the need to monitor expectations and ensure such behaviour does not become entrenched," said Allan Monks, an economist at JP Morgan.

Mervyn King, Governor of the Bank, is expected to be cautious about growth, despite a stronger-than-expected 1.1pc increase in GDP in the second quarter - marking three successive quarters of growth.

He warned at a recent Treasury Committee hearing that there was no guarantee the recovery will be sustained while weakness in key export markets and subdued bank lending remained threats.

Considering the MPC have hit the inflation target what 9 months out of 50, not hitting there target is normal policy I mean why would anyone be embarrassed about it? If only everyone's working life was like this, don't hit your target keep your job and get paid come what may.

It's the future.

Share this post


Link to post
Share on other sites

Why they even bother to have an inflation target is beyond me as they obviously don't give a monkeys about inflation any more.

I suspect Merv will trash talk the Pound this week. He hasn't done for quite a while so we are well overdue...

Share this post


Link to post
Share on other sites

Quite.

Did you hear on the radio this morning that 1 in 3 businesses are considering job cuts?

vive la recovery.

Share this post


Link to post
Share on other sites

Quite.

Did you hear on the radio this morning that 1 in 3 businesses are considering job cuts?

vive la recovery.

...and our fantastic media industry kept going about the recovery while this was the plan all along.

Share this post


Link to post
Share on other sites

http://www.telegraph.co.uk/finance/economics/7933403/Gloomy-outlook-expected-from-Bank-of-England.html

Considering the MPC have hit the inflation target what 9 months out of 50, not hitting there target is normal policy I mean why would anyone be embarrassed about it? If only everyone's working life was like this, don't hit your target keep your job and get paid come what may.

It's the future.

That will be a buy signal for stocks then? This is just the sort of thing the government need to announce to stimulate the FTSE and get people investing again as the prospects for more losses and declining profits look better than ever!

I wonder if it worked this time--anyone seen the latest FTSE data this morning?

Share this post


Link to post
Share on other sites

That will be a buy signal for stocks then? This is just the sort of thing the government need to announce to stimulate the FTSE and get people investing again as the prospects for more losses and declining profits look better than ever!

I wonder if it worked this time--anyone seen the latest FTSE data this morning?

Despite your sarcasm RB, a lot of people seem to believe that cost-cutting is good at any point, in any industry, no matter what.

Whilst this can be see as generally true, sometimes the bean counters have their way and end up undermining the future of a business. Great if you plan to hold the shares for the short term, but horrible if you plan to be a long-termer.

Especially when everyone's at it..

Share this post


Link to post
Share on other sites

Despite your sarcasm RB, a lot of people seem to believe that cost-cutting is good at any point, in any industry, no matter what.

Whilst this can be see as generally true, sometimes the bean counters have their way and end up undermining the future of a business. Great if you plan to hold the shares for the short term, but horrible if you plan to be a long-termer.

Especially when everyone's at it..

Agree. Short-term euphoria on bad news: buy the rumour, sell the news.

Right now the rumours are things are going to get rough so buy shares and when the shinola eventually hits the fan (at least 3 months away) sell on the reality.

We are in one of those weird contrarian markets yet again where bad news = buy. Good news = sell.

I am overall less than 3% in stocks now and cannot see anything but misery medium and long term as jobs are lost and purchasing power is diminished. The US are going into deflation as people refuse to borrow more and are saving. No amount of QE will encourage people to borrow and spend when they do not trust the economy,

IMO we will feel the next bout of chill winds from across the Atlantic just as winter starts to set in. IN the meantime everything is looking bad with the BoE getting gloomy again and October job cuts looming. What better reason to see the FTSE and Sterling soar?

IMO the fundamentals are negative and for me that is a sell signal.

BTW:

FTSE 100 5412.88+1.51%

http://uk.finance.yahoo.com/news/pound-hovers-near-6-month-high-vs-ailing-dollar-reuters_molt-c123d7eac991.html?x=0

UK INFLATION REPORT AWAITED

In addition to the weak dollar, sterling has been bolstered by the view that the UK economy is recovering following some solid data in the past month or so and buoyant earnings reports from UK financial institutions.

General (3166.KL - news) pound bullishness prompted many investors to shrug off a weak reading of British industrial production on Friday.

Markets await figures on UK retail sales and the nation's labour market this week, as well as the Bank of England's quarterly inflation report due on Wednesday.

The central bank's latest price projections are likely to suggest more subdued growth over the next two years than in the previous report in May, due to massive spending cuts announced by the new coalition government.

But the inflation forecast may be significantly higher to account for a rise in value-added tax from next year. Such a view would add to the BoE's dilemma of how to control price pressures without undermining a still fragile recovery.

Edited by Realistbear

Share this post


Link to post
Share on other sites

But the inflation forecast may be significantly higher to account for a rise in value-added tax from next year. Such a view would add to the BoE's dilemma of how to control price pressures without undermining a still fragile recovery.

Didn't we just know the VAT increase was going to be wheeled out as an excuse for why future inflation is going to be so high...

The Jokers at the BoE need to let go of is this whole 'recovery' nonsense. There is no recovery. The economy is a zombie powered by Stimulus, ZIRP and QE. Take away all three and we'll see the real picture.

Edited by MrFlibble

Share this post


Link to post
Share on other sites

Didn't we just know the VAT increase was going to be wheeled out as an excuse for why future inflation is going to be so high...

The Jokers at the BoE need to let go of is this whole 'recovery' nonsense. There is no recovery. The economy is a zombie powered by Stimulus, ZIRP and QE. Take away all three and we'll see the real picture.

+1

1) Jobs being lost

2) Bills going up

3) Business going bust

4) If you have savings you screwed

5) You cannot afford to buy a business as either too in debt or too expensive

6) You cannot buy a house since too expensive and certainly not for yield

7) sellers cannot sell since they are so in debt but can just about afford to sit it out.

So even if you saw it all coming you cannot benefit from this recession (in most cases) by not allowing losers we are all losers.

All the people i know with financial sense are in dispair sitting on savings they want to buy businesses/property but understand its a new situation where everything is false. Its like they are being starved out low savings rates and now inflation but they know as soon as they step out they will be murdered later.

Zombieland

Share this post


Link to post
Share on other sites

IMO we will feel the next bout of chill winds from across the Atlantic just as winter starts to set in. IN the meantime everything is looking bad with the BoE getting gloomy again and October job cuts looming. What better reason to see the FTSE and Sterling soar?

IMO the fundamentals are negative and for me that is a sell signal.

This morning's Five live Money programme is well worth a listen to re the coming public sector cuts and the affect on the economy.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=148879&st=0&gopid=2660898entry2660898

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 152 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.