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Thank Goodness Someone Is Concerned About Inflation

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http://www.bbc.co.uk/news/uk-politics-12183584

This guy argues that the later they leave it to raise rates the higher they will have to go. What do you make of that?

Plus he says lenders are starting to ignore the BoE and raise rates anyway. Sounds a bit like an idle threat to me (or they'll just raise the cost of borrowing, not pay out better rates to savers) but good on him for making the argument anyway.

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http://www.bbc.co.uk/news/uk-politics-12183584

This guy argues that the later they leave it to raise rates the higher they will have to go. What do you make of that?

Plus he says lenders are starting to ignore the BoE and raise rates anyway. Sounds a bit like an idle threat to me (or they'll just raise the cost of borrowing, not pay out better rates to savers) but good on him for making the argument anyway.

If Merv remains vigilant the bond market will raise rates in any event. Bonds rise when the market sees risk coming. And inflation is a BIG risk to our ecnomy.

IIRC our bonds are already dropping in value as the IR begin to rise.

In the end the market always wins. What Merv fails to do today will be done later--but more so.

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http://www.bbc.co.uk/news/uk-politics-12183584

This guy argues that the later they leave it to raise rates the higher they will have to go. What do you make of that?

Plus he says lenders are starting to ignore the BoE and raise rates anyway. Sounds a bit like an idle threat to me (or they'll just raise the cost of borrowing, not pay out better rates to savers) but good on him for making the argument anyway.

Banks are free to set rates as they choose but normally tie to Libor which is rising http://www.thisismoney.co.uk/libor

But for the housing market I suspect interest rates would be rising, but there is a fear of what may happen.

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You can forget the BoE raising rates of its own accord. Low rates are there to stop the economy imploding (or certainly there in a vain attempt to stop it imploding) and to try to inflate away the nation's debts via inflation.

It couldn't have been clearer today than when the BBC asked George Osbourne what he thought about the 'shock' inflation figures for December and the BoE's inaction on rates. He said:

"Of course we need to worry about inflation, but we also need to focus on paying back this country's huge debts."

If that is not a straight out admission that they are purposefully trying to inflate the countries debts away by destroying the currency, I don't know what is.

The only way we'll get higher rates is by the bond markets demanding it. However, the bond markets tried to push rates in the eurozone and the ECB just stepped in and monetised all the junk. Don't expect any different here in the UK. Free markets no longer exist, this is fantasy land.

Bottom line, your savings and sterling are going to be toast. You know the rest of the story by now.

Edited by General Congreve

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  • 311 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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