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OzzMosiz

Interest Rate Decision

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With Merv and the other 3 voting for a hold on IR's last month, and the other 5 on a drop. I wonder if the 4 for a hold will now vote for a rise, especially considering the new data showing the drop was a dire decision. Will the other 5 vote for a hold or any of them a further drop.

This is going to be interesting.

Roll on 8th September.

Edited by OzzMosiz

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Will Merv and the other 3 vote for a hold, so as not to embarrass the other 5 and save them face?

If they do, this would be like the 4 holders voting for a cut last month, but with worse economic evidence!

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Guest Charlie The Tramp

Well it has been known to happen before. Cut one month then back up the next.

Mon, 05 May 1975 10.00

Mon, 21 Apr 1975 9.75

Mon, 24 Mar 1975 10.00

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With Merv and the other 3 voting for a hold on IR's last month, and the other 5 on a drop. I wonder if the 4 for a hold will now vote for a rise, especially considering the new data showing the drop was a dire decision. Will the other 5 vote for a hold or any of them a further drop.

This is going to be interesting.

Roll on 8th September.

Why was it a dire decision? It doesn't appear to have had any effect on anything.

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Why was it a dire decision?  It doesn't appear to have had any effect on anything.

It allowed the banks to widen the spread between borrowing and saving, why not give them another chance to do the same on the way up to.

I would love to see the voting the 5 boe members for a rise, 4 government for a fall, just to show everyone how 'independent' of the government the decision is.

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It allowed the banks to widen the spread between borrowing and saving, why not give them another chance to do the same on the way up to.

I would love to see the voting the 5 boe members for a rise, 4 government for a fall, just to show everyone how 'independent' of the government the decision is.

The BoE isn't even faintly interested in savers, its prime objective is allegedly to keep a lid on inflation (which will now get blamed solely on oil prices and be considered out of the bank's control) and its secondary one to keep the economy afloat. Nothing would surprise me less than another cut this month.

Edited by Bluelady

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The worrying thing is the 5 who voted for a cut still out number the ones with more sense, therefore rates could still be cut again next month should those 5 vote for a cut again.

Edited by simon99

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Guest Charlie The Tramp
The BoE isn't even faintly interested in savers, its prime objective is allegedly to keep a lid on inflation (which will now get blamed solely on oil prices and be considered out of the bank's control) and its secondary one to keep the economy afloat.  Nothing would surprise me less than another cut this month.

They are also responsible for financial stability which would include debt, and you could put saving into that section. What is more stable than an individual who saves for that rainy day. The government are concerned that people are not saving for the future and I believe Mervyn also. The BoE have warned that the serious debt bubble could put the UK into recession. So I would think the MPC look at everything. The transcripts of the meetings are never published only edited minutes. I bet they don`t publish the interesting parts of the meetings.

Cheap money has gone for a very long time, a hold this month.

The worrying thing is the 5 who voted for a cut still out number the ones with more sense, therefore rates could still be cut again next month should those 5 vote for a cut again.

I bet when Mervyn and the two Deputies together with Tucker voted for a hold the other five were flabergasted.

Edited by Charlie The Tramp

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The worrying thing is the 5 who voted for a cut still out number the ones with more sense, therefore rates could still be cut again next month should those 5 vote for a cut again.

One of my points of why I think it'll be one of the most interesting meetings.

If those 5 do vote for a cut again and Merv and the other 3 vote for a rise, then

the team are not independant at all.

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The psychological factor has to be taken into account - it's been said by someone (Merv?) that the expectation of an interest rate raise or cut has the same effect as the actual rate raise or cut.

Given that the markets appear to be so sensitive to such things, what would be the psychological impact of 2 consecutive cuts? Wouldn't this whiff of panic and have city editors using phrases like "stave off a recession" etc etc?

Surely the cutters would consider risky to cut this month for that reason alone. Merv votes last, and he voted against the cut last month - he was sending them a message IMO.

Edited by Leodhasach

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I suspect it will stay put till november by which time oil will be really high and petrol, and it will be the cover for rate rises which will be scapegoated for a terrible terrible xmass shopping.

Or if xmass is not trible but still poor, then base rate may be held till spring or even lowered another quater for good feel around xmass.

In this second senario the spring 06 housing bounce will be seriously -ve, so to provide a scapegoat for that rate will be raised in sring. The rational will be that by that time oil and petrol we be higher still than xmass and US rates should be around 4.0 or 4.25.

Just some ideas.

Sp1

Yes acwalker at extreem times rates can move by more than 0.25 % a month.

check this out. (Though i thinck the data is quaterly the mover from the 70's to 95 illistrate the point)

http://www.housepricecrash.co.uk/forum/ind...ype=post&id=882

Edited by sp1

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The BoE isn't even faintly interested in savers, its prime objective is allegedly to keep a lid on inflation (which will now get blamed solely on oil prices and be considered out of the bank's control) and its secondary one to keep the economy afloat.  Nothing would surprise me less than another cut this month.

In a sense, keeping a lid on inflation and looking after the interests of savers is the same thing!

frugalista

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  • 301 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% +
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      • Even
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