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Breaking News - Ir's Remain Unchanged At 0.5%

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Merv's lost the plot I fear and is now just an HPI guardian. It's all very pathetic and sad but there you go, this is what we must now suffer. :blink:

What a load of old ****** even having this meeting every month is. It's just an exercise in pretense. :rolleyes:

£10 Jaffa Cakes coming up..................or is it deflation???

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Wages are being held down by this policy, yet inflation is forging ahead as per usual - sounds like a death spiral to me as the consumer is squeezed eternally by the BoE.

The BoE is always aggresively expansionist and refuses to control inflation. IR rate hikes are always a few too many steps behind inflation. That IS its policy. Any study of its role and its [purposefully] inaccurate and misleading forecasting backs up this view.

The problem is the world has changed and they haven't.

Edited by gruffydd

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Wages are being held down by this policy, yet inflation is forging ahead as per usual - sounds like a death spiral to me as the consumer is squeezed eternally by the BoE.

The BoE is always aggresively expansionist and refuses to control inflation. IR rate hikes are always a few too many steps behind inflation. That IS its policy. Any study of its role and its [purposefully] inaccurate and misleading forecasting backs up this view.

The problem is the world has changed and they haven't.

As long as the big banks are making big profits nothing else matters in the UK AD2010.

When faced with the dilemma: 'help the banks' or 'help the real economy', the BoE will ALWAYS go for the former.

A good servant always wants to please their master. Otherwise...

Elizabeth_Brownrigg_flogging_a_servant.JPG

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UK interest rates remain at record low of 0.5%

Bank of England Interest rates have been at 0.5% since March 2009

The Bank of England has kept UK interest rates on hold at a record low of 0.5% for the 18th consecutive month.

The Monetary Policy Committee's (MPC) decision had been expected, but calls have been growing for an increase in rates to curb inflation.

CPI inflation was 3.1% in July, above the Bank of England's 2% target rate.

And minutes from last month's MPC meeting showed that one member, Andrew Sentance, had voted for a rate rise for the third month in a row.

'Order to shoot'

The Bank has left rates unchanged at the historic low of 0.5% since March 2009.

The MPC also announced it was continuing with the Bank's £200bn quantitative easing (QE) regime, and some believe the programme is about to be expanded.

"The Bank of England has held fire for another month, but we think the quantitative easing gun is about to be reloaded and the order to shoot given," said IoD chief economist Graeme Leach.

"Whilst above target inflation has stopped the MPC pulling the trigger on a further extension in QE this month, the economic threat from weak money supply growth looms ever larger."

The latest rate decision comes a day after forecasters at the National Institute of Economic and Social Research predicted that the Bank would keep interest rates at 0.5% until mid-2011 at the earliest.

'Bumpy and slow'

The UK economy grew by 1.2% in the second quarter, but there have been indications that the pace of growth has slowed since then.

Lai Wah Co, CBI head of economic analysis, said the MPC decision had been widely expected.

"In recent weeks there has been more talk about the need to expand monetary policy, amid concerns about how quickly growth momentum will fade in the coming quarters at home and abroad," she said.

"However, economic indicators still suggest the UK recovery is on track, although we expect it to be bumpy and slow."

The British Chambers of Commerce (BCC) said the decision to leave interest rates unchanged was the right one.

"The government's tough deficit-reduction measures, although necessary to repair the public finances, will increase the threat of an economic setback," said David Kern, the BCC's chief economist.

"Since sustaining the recovery must remain the priority, it is absolutely vital that the MPC maintains the current low level of interest rates until the middle of 2011 at the earliest."

BBC

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Today's interest rate announcement confirms that the UK economy is still on its knees, on the floor and in very very serious trouble - and in further decline.

Actually it's probably far worse than that.

Despite "recovery" being cheerily propagated by the media.

Edited by billybong

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I think IRs are immaterial to house prices now - a rise would be wonderful news - as the coming public sector job losses will be a main driver IMPO in falling house prices.

Not sure..

In my case, this stuff about SMI made me do some calculations.. and at current interest rates, were I made redundant, between Tax credits, SMI, my wife's job and various other bits and pieces, we wouldn't be that much worse off. Repossession would certainly not be on the cards.

As far as I can tell, you have to really work at it to get repo'd.

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UK interest rates remain at record low of 0.5%

....

The British Chambers of Commerce (BCC) said the decision to leave interest rates unchanged was the right one.

:lol::lol:

It's just like saying people in a lot of debt think it's a good decision.

It's got nothing at all to do whether it's good for the UK economy as a whole.

Edited by billybong

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Wages are being held down by this policy, yet inflation is forging ahead as per usual - sounds like a death spiral to me as the consumer is squeezed eternally by the BoE.

The BoE is always aggresively expansionist and refuses to control inflation. IR rate hikes are always a few too many steps behind inflation. That IS its policy. Any study of its role and its [purposefully] inaccurate and misleading forecasting backs up this view.

The problem is the world has changed and they haven't.

I think the public should accept the BoE is pro growth first, tame inflation second (will rather err on more inflation than err on less growth) and plan accordingly.

Wondering the continuous 0.5% will also lead to capital fleeing the UK (though not sure where to flee to) and hence even less money to lend on mortgages?

Edited by easybetman

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I think the public should accept the BoE is pro growth first, tame inflation second (will rather err on more inflation than err on less growth) and plan accordingly.

Wondering the continuous 0.5% will also lead to capital fleeing the UK (though not sure where to flee to) and hence even less money to lend on mortgages?

Trouble is they're sowing the seeds of further imbalances and economic crises with their distorted approach, just as they did before. They never seem to learn. Same old men. Same fossilised thinking.

Edited by gruffydd

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Trouble is they're sowing the seeds of further imbalances and economic crises with their distorted approach, just as they did before. They never seem to learn. Same old men. Same fossilised thinking.

Yap yap... I am still trying to figure out what an economy that commits most of its capital in bricks and mortar and nothing else will look like...

I suppose BoE objective is to ensure that there is no crisis until they collect their pension...Then it is someone else problem.

I watch a documentary this morning and a Chinese guy (PhD) was saying that house prices in China will have to fall because of the demographic as there

will be more houses than people. Don't think UK demographic is that far better either (as discussed before).

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M&S have had some very good deals in recent weeks - 3 packs of red meat such as steak, sausages, burgers for a tenner, 3 for a fiver on chicken, hams, etc. Frozen food has been 3 for the price of 2. If you shopped carefully you could get a pretty decent shopping basket.

Noticed yesterday that virtually all the deals have now gone. That the chiken, hams deal is 2 for £4.50 and that the chicken portions are noticeably smaller. They even have made the plastic cartons onthe roast chicken breasts smaller to disguise the fact, IMPO, that the portions are smaller.

Cost of living is rising.

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M&S have had some very good deals in recent weeks - 3 packs of red meat such as steak, sausages, burgers for a tenner, 3 for a fiver on chicken, hams, etc. Frozen food has been 3 for the price of 2. If you shopped carefully you could get a pretty decent shopping basket.

Noticed yesterday that virtually all the deals have now gone. That the chiken, hams deal is 2 for £4.50 and that the chicken portions are noticeably smaller. They even have made the plastic cartons onthe roast chicken breasts smaller to disguise the fact, IMPO, that the portions are smaller.

Cost of living is rising.

The real measure of food costs is price per kilo, if you shop by pack size and special deals you are more likely to fall for the old change-the-pack-size trick. The cost of my staples (beef mince, pasta/rice, root vegetables, fruit, tinned stuff, milk) seems pretty much unchanged on a year ago.

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I think the public should accept the BoE is pro growth first, tame inflation second (will rather err on more inflation than err on less growth) and plan accordingly.

Wondering the continuous 0.5% will also lead to capital fleeing the UK (though not sure where to flee to) and hence even less money to lend on mortgages?

Nah, the BoE us about banks and their welfare...thats why it exists.

What other institution needs another to lend it overnight if things get a bit tight? Others would call that insolvency. the BoE calls it Liquidity.

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You guys may want an interest rate rise to speed up the property crash. But there is no way the wider economy justifies an increase in the base rate.

Edited by InsideEdge

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Awesome!

<< insert monthly gloating about lifetime BoE+0.8% tracker mortgage here >>

0.8 you say, is that better or worse than a 0.62 offset lifetime tracker :P

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You guys may want an interest rate rise to spped up the property crash. But there is no way the wider economy justifies an increase in the base rate.

Lets see, savers cant spend much because their capital is producing bupkiss.

there are more savers than indebted mortgage holders....

I want a rate rise so that banks can be busted, indebted can be freed and the economy can continue to flourish.

work it out.

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I think IRs are immaterial to house prices now - a rise would be wonderful news - as the coming public sector job losses will be a main driver IMPO in falling house prices.

You're kidding!! A rise in IRs back to more normal levels of 5-8%pa would see house prices falling 20-40%! They would have

already done so but for the big IR cuts in 2009.

House prices will fall over the next year or two due to unemployment rising, I agree, but this fall would be dwarfed by the fall that higher IRs would cause.

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Well thats Merv's job. Look after his bankster chums.

and happy people on tracker mortgages :D

I believe interest rates will not rise above 1% until 2015 at the earliest. Even when they do they will rise gradually.

We will not see rates of 5% for many years.

The only factor that would make me change my mind would be significant wage inflation particularly in the public sector but I doubt very much we will see this happening.

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You're kidding!! A rise in IRs back to more normal levels of 5-8%pa would see house prices falling 20-40%! They would have

already done so but for the big IR cuts in 2009.

House prices will fall over the next year or two due to unemployment rising, I agree, but this fall would be dwarfed by the fall that higher IRs would cause.

No, I am not kidding.

Yes, IRs back to where they 'should be' would collapse the housing market. But something else is now afoot - something new.

People are underestimating the Public Sector cuts to come because they have not happened - yet. By the end of Nov things will be much clearer.

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You guys may want an interest rate rise to speed up the property crash. But there is no way the wider economy justifies an increase in the base rate.

That's a distortion of reality. Most of us want interest rates to reflect reality rather than sow the seed of future imbalances. The SMPC is pretty evenly split btw, and there's no consensus even among mainstream academic economists on this issue.

Edited by gruffydd

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snip

We will not see rates of 5% for many years.

snip

well, apart from people needing to borrow for a house purchase where fees and terms make 5% ish the norm, much worse for others.

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  • 145 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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