One More Mpc Member Votes For Rate Rise.

[Pent Up]

Fat lot of good it will do now though.

http://www.forexfactory.com/calendar.php

Edit: would the MPC have had access to a preliminary preliminary figure? Would they have had a indication of what it might be sort of a running total?

Edited January 26, 2011 by Pent Up

[FIGGY]

In summary;

■MPC’s Swan saw risk CPI remains above target in medium term.

■BOE’s Weale joined Sentance in voting for 25 basis point rate increase.

■Small rate rise would leave policy “highly accommodative”.

■BOE says “most likely prospect” is for continued U.K. growth.

■CPI risk change may be casr for some stimulus withdrawal.

■BOe says U.K. recovery continued “broadly as expected

[shindigger]

KILL THE WITCH!!

KILL IT!!

[FIGGY]

Just reading through the full notes, I though this was interesting but how interesting hangs on if they knew about the GDP numbers at the meeting

For one member, the balance of risks to inflation continued to warrant an expansion of the

Committee’s programme of asset purchases, financed by the issuance of central bank reserves, because

it was likely that inflation would fall to below the target in the medium term. This member

acknowledged that a sustained upward trend in commodity prices or in global demand prospects, or a

shift in sentiment against sterling, could outweigh the domestic forces pushing down on inflation. But

this member did not see this risk as yet large enough to require a policy tightening.

Edited January 26, 2011 by FIGGY

[Realistbear]

:43, Wednesday 26 January 2011

LONDON (

Reuters

) - Sterling rose against the dollar and the euro on Wednesday, while gilt futures fell after the minutes from the January meeting of the Bank of England's Monetary Policy Committee showed policymakers considered a rate rise.

The minutes also showed Bank of England policymaker Martin Weale unexpectedly joined Andrew Sentance in voting for a quarter-point rate rise this month.

[exiges]

The minutes also showed Bank of England policymaker Martin Weale unexpectedly joined Andrew Sentance in voting for a quarter-point rate rise this month.[/indent]

There's that word again.

[tennaval]

:43, Wednesday 26 January 2011

LONDON (

Reuters

) - Sterling rose against the dollar and the euro on Wednesday, while gilt futures fell after the minutes from the January meeting of the Bank of England's Monetary Policy Committee showed policymakers considered a rate rise.

The minutes also showed Bank of England policymaker Martin Weale unexpectedly joined Andrew Sentance in voting for a quarter-point rate rise this month.

too bad Andrew Sentance leaves MPC mid year.......Merv can manipulate further by hiring another stooge

[Tired of Waiting]

And the continued weakness of the housing market would most likely remain an impediment to construction sector activity for some time.

Of course! And what is the solution then? Shapps' "2%" below average earnings/year for 1 or 2 decades?!

Or a -10% nominal for 2 or 3 years, thus getting this fecking sucker back down to affordable levels as soon as possible? (10%/y will not break the banks).

[Pent Up]

Just reading through the full notes, I though this was interesting but how interesting hangs on if they knew about the GDP numbers at the meeting

Thats the big question; did they have an indication of the GDP at this meeting?

Ignoring that GDP figure reading those minutes I get the impression that rates would probably rise within a month or two.

Anyway the bad GDP figure was cos of the snow. The treasury said so. Who are we, or the BOE, to question it. It's a one month temporary factor. Rates up please!

Edited January 26, 2011 by Pent Up

[rantnrave]

Thats the big question; did they have an indication of the GDP at this meeting?

Ignoring that GDP figure reading those minutes I get the impression that rates would probably rise within a month or two.

Anyway the bad GDP figure was cos of the snow. The treasury said so. Who are we, or the BOE, to question it. It's a one month temporary factor. Rates up please!

Well, the Pound's up pretty much across the board. Does that suggest the MPC did have the GDP figures to hand and a rate rise is back on the cards?

[Realistbear]

Prospect of higher rates and slowing economy/demand are wonderful for stocks: FTSE 100 5,986.78 +69.07 +1.17%

Load up folks--FTSE 7000 at the current rate of good news for the economy!

Clear BUY signal from the Forex boys--what could be better for UK Plc? No recovery, stagflation, poor growth: BUY BUY BUY

http://uk.finance.yahoo.com/news/Forex-focus-Britain-prepare-tele-4204879095.html?x=0

Experts fear that a period of 'stagflation’ - high inflation and stagnant growth - could see Britain wave goodbye to its economic recovery.

Edited January 26, 2011 by Realistbear

[Fawkandles]

Prospect of higher rates and slowing economy/demand are wonderful for stocks: FTSE 100 5,986.78 +69.07 +1.17%

Load up folks--FTSE 7000 at the current rate of good news for the economy!

Clear BUY signal from the Forex boys--what could be better for UK Plc? No recovery, stagflation, poor growth: BUY BUY BUY

http://uk.finance.yahoo.com/news/Forex-focus-Britain-prepare-tele-4204879095.html?x=0

Experts fear that a period of 'stagflation’ - high inflation and stagnant growth - could see Britain wave goodbye to its economic recovery.

When it comes to the markets, you really are ignorant.

[Pent Up]

Full minutes: http://www.bankofengland.co.uk/publications/minutes/mpc/pdf/2011/mpc1101.pdf

[scottbeard]

There is no chance *at all* of a rate rise in the next 3 months after yesterday's GDP figures. If the next one is also negative there will be no rate rises in 2011, regardless of inflation.

If i'd been on the MPC i'd have voted for a rise then too, but not now. It would help your typical HPCer, but overall would do more harm that good now.

[Realistbear]

There is no chance *at all* of a rate rise in the next 3 months after yesterday's GDP figures. If the next one is also negative there will be no rate rises in 2011, regardless of inflation.

If i'd been on the MPC i'd have voted for a rise then too, but not now. It would help your typical HPCer, but overall would do more harm that good now.

+1.25 (the extra .25 covers recent inflation)

[longtomsilver]

Of course! And what is the solution then? Shapps' "2%" below average earnings/year for 1 or 2 decades?!

Or a -10% nominal for 2 or 3 years, thus getting this fecking sucker back down to affordable levels as soon as possible? (10%/y will not break the banks).

How about meeting in the middle ?

-5% nominal for 3-4 years and 2% below average earnings for a decade.

Both are unpallatable but an all out house price crash now would put the whole country up against the wall more so than it is already. We need to slowly deflate the bubble and withdraw from our credit addiction or the shock will kill the patient cause a pandemic.

[Pent Up]

There is no chance *at all* of a rate rise in the next 3 months after yesterday's GDP figures. If the next one is also negative there will be no rate rises in 2011, regardless of inflation.

If i'd been on the MPC i'd have voted for a rise then too, but not now. It would help your typical HPCer, but overall would do more harm that good now.

So what can be done about the 'negflation' situation? Say three/six months time inflation is 5% and rising and inflation expectations are going through the roof yet we still have negative growth? Surely the inflation will be more damaging in that situation than IR rise? Does it matter whether you are paying out an extra £20 per week on fuel/food/essentials or on higher mortgage payments. The difference is the first effects everybody, the second doesn't.

Edited January 26, 2011 by Pent Up

[neil324]

So what can be done about the 'negflation' situation? Say three/six months time inflation is 5% and rising and inflation expectations are going through the roof yet we still have negative growth? Surely the inflation will be more damaging in that situation than IR rise? Does it matter whether you are paying put an extra £50 per week on fuel/food/essentials or on higher mortgage payments. The difference is the first effects everybody, the second doesn't.

They will take a gamble that it doesn't spiral. Only time will tell.

[LiveAndLetBuy]

Thats the big question; did they have an indication of the GDP at this meeting?

...

Apparently not: http://www.telegraph.co.uk/finance/economics/8283104/Bank-of-England-MPC-minutes-Martin-Weale-joins-Andrew-Sentance-to-vote-for-interest-rate-rise.html

...

However, the deliberations at the monthly two-day meeting, which concluded on January 13, came before Tuesday’s shock news that the economy contracted at the end of 2010.

The MPC policymakers had an advance estimate of the latest inflation rate to hand, which came in at an eight-month high of 3.7c, but would not have had the equivalent for GDP, which is released later.

Their expectation was that the economy would grow roughly in line with trend in late 2010 and early 2011, when the snow in December and January’s VAT rise were taken out of the equation.

Analysts said that the 0.5pc fall in gross domestic product (GDP) in the fourth quarter was a game-changer. The Office for National Statistics (ONS) estimated that even without the snow, growth would have been flat.

“If UK GDP had not contracted … this would clearly have signalled that a February rate hike was on the cards, but the dire number yesterday and the consequent uncertainty about the strength of the economy is likely to have shifted this decision forward,” said Joost Beaumont, an economist at A

...

[Tired of Waiting]

How about meeting in the middle ?

-5% nominal for 3-4 years and 2% below average earnings for a decade.

Both are unpallatable but an all out house price crash now would put the whole country up against the wall more so than it is already. We need to slowly deflate the bubble and withdraw from our credit addiction or the shock will kill the patient cause a pandemic.

-10% / year is fine. It is slow enough. It won't cause a pandemic. We need to recover international competitiveness - please see my sig., below.

[longtomsilver]

-10% / year is fine. It is slow enough. It won't cause a pandemic. We need to recover international competitiveness - please see my sig., below.

A week ago I would have agreed with you wholeheartedly, however this week I now have to 'fess up and mention that I am now a VI oh what the heck - bring the crash on now for the good of our country.

[Tired of Waiting]

A week ago I would have agreed with you wholeheartedly, however this week I now have to 'fess up and mention that I am now a VI oh what the heck - bring the crash on now for the good of our country.

"Respec"!

That is impressive self-awareness, and honesty!

Thanks for that tomposh101.

And for your altruism as well!

[catmandu]

I'm happy to pat myself on the back for predicting this result (in my poll thread which no one read)

Another vote for IR increase, but more importantly sign of wavering from other members. Merv's speech on how he won't increase rates is irrelevant if the other members vote against him.

Unfortunately the poor growth figures which came out later probably do mean no rate rise for another 2 months, possibly more. So we need a bit more patience but hopefully in April we'll get a rise.

[Tired of Waiting]

I'm happy to pat myself on the back for predicting this result (in my poll thread which no one read)

Another vote for IR increase, but more importantly sign of wavering from other members. Merv's speech on how he won't increase rates is irrelevant if the other members vote against him.

Unfortunately the poor growth figures which came out later probably do mean no rate rise for another 2 months, possibly more. So we need a bit more patience but hopefully in April we'll get a rise.

I guess in April the MPC meeting will happen before the GDP numbers for Q1 are published, repeating what we just had in January.

If so, I guess the MPC will try to wait for the GDP numbers, and decide about the base rate in May.

[catmandu]

I guess in April the MPC meeting will happen before the GDP numbers for Q1 are published, repeating what we just had in January.

If so, I guess the MPC will try to wait for the GDP numbers, and decide about the base rate in May.

Yes, that's probably the most likely outcome...but I just have a sneaky feeling that if inflation continues to rise that others may be inclined to take action.