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Realistbear

All 62 Economist In Latest Survey Say Merv Will Remain Vigilant

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http://www.bloomberg.com/news/2011-02-05/bank-of-england-may-maintain-stimulus-as-inflation-accelerates.html

Bank of England to Hold Rate as Officials Fight Over Inflation, Recovery
By Jennifer "Jenny" Ryan - Feb 5, 2011 12:01 AM GMT
The Bank of England will probably maintain emergency stimulus for the economy next week as policy makers assess whether a 13-month bout of above-target inflation will become entrenched in the economy.
The nine-member Monetary Policy Committee, led by Governor Mervyn King, will leave the benchmark interest rate at a record low of 0.5 percent,
according to all 62 economists in a Bloomberg News survey
. They’ll also keep their bond purchase plan at 200 billion pounds ($322 billion), said all 38 economists in a separate poll.

Given the precarious state of the housing market and the importance of maintaining prices and avoiding mass repos there is NO WAY Merv is going to remain other than vigilant. Even if inflation rises 100% from here.

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http://www.bloomberg.com/news/2011-02-05/bank-of-england-may-maintain-stimulus-as-inflation-accelerates.html

Bank of England to Hold Rate as Officials Fight Over Inflation, Recovery
By Jennifer "Jenny" Ryan - Feb 5, 2011 12:01 AM GMT
The Bank of England will probably maintain emergency stimulus for the economy next week as policy makers assess whether a 13-month bout of above-target inflation will become entrenched in the economy.
The nine-member Monetary Policy Committee, led by Governor Mervyn King, will leave the benchmark interest rate at a record low of 0.5 percent,
according to all 62 economists in a Bloomberg News survey
. They’ll also keep their bond purchase plan at 200 billion pounds ($322 billion), said all 38 economists in a separate poll.

Given the precarious state of the housing market and the importance of maintaining prices and avoiding mass repos there is NO WAY Merv is going to remain other than vigilant. Even if inflation rises 100% from here.

:rolleyes:

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I read this. But after reading last months minutes this will be the first month I'll be eagerly awaiting the announcement as there may be a slight possibility of an increase if inflation takes another turn for the worsed.

Or, are they just trying to calm the markets by pretending that they will act on inflation soon?

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I read this. But after reading last months minutes this will be the first month I'll be eagerly awaiting the announcement as there may be a slight possibility of an increase if inflation takes another turn for the worsed.

Or, are they just trying to calm the markets by pretending that they will act on inflation soon?

Rumour has it that Merv is going to shift from "Vigilant" to "Very vigilant."

With a HPC in the offing they will not raise IR. No way--never. At least not until this current cycle is over and that's years away.

Edited by Realistbear

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I read this. But after reading last months minutes this will be the first month I'll be eagerly awaiting the announcement as there may be a slight possibility of an increase if inflation takes another turn for the worsed.

Or, are they just trying to calm the markets by pretending that they will act on inflation soon?

If they are worried about an increase knocking consumer confidence they may as well not bother cos its on the floor anyway. May as well put the rates up now, get the crash over with and enjoy an Olympic recovery in 2012. Please, Pretty Please!!!!

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Rumour has it that Merv is going to shift from "Vigilant" to "Very vigilant."

With a HPC in the offing they will not raise IR. No way--never. At least not until this current cycle is over and that's years away.

I believe that eventually we'll end up having an ERM moment as they continue to try to fight reality but the real world gives them a nasty punch on the nose, either in the form of the bond markets forcing rates up or, if they manage to continue to fudge rates lower with more QE, inflation lets rip and gives the economy the kicking it is due in that way instead.

I see our economy a bit like a dam that has been badly built and as a result has sprung the twin leaks of a house price crash and an economic crash. They've stepped in and plugged the leaks with the 'two-hands' of QE and ZIRP, but because the whole structure in fundamentally unsound, blocking the leaks in the dam only serves for the dam to pop more holes, e.g. currency devaluation and inflation, and with only two hands available to plug holes, the BoE is ultimately doomed to fail in maintaining the integrity of the dam.

Edited by General Congreve

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Guest The Relaxation Suite

What do the three following scenarios have in common?

1. Gordon Brown holds a press conference in which he tells the world of his lifetime desire to be a can can dancer on the Moulin Rouge.

2. Mervyn King and the Archbishop of Maputo announce their engagement to the world's media while dressed in bermuda shorts and holding banana daiquiris.

3. On clearing out his cage, a zookeeper will discover that Bulu the Orangutan has been writing a book in which he has solved the Riemann hypothesis.

Answer: all three are all significantly more likely than a rise in UK interest rates any time soon.

Edited by Tecumseh

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Rumour has it that Merv is going to shift from "Vigilant" to "Very vigilant."

The MPC are going to "mauve alert".

Even if it does mean changing the bulb.

Yes, it's THAT serious!

Can we now doubt that this redoubtable bunch have the "right stuff"?

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Given the precarious state of the housing market and the importance of maintaining prices and avoiding mass repos there is NO WAY Merv is going to remain other than vigilant. Even if inflation rises 100% from here.

Inflation, what inflation? I thought we are in the battle of our lives against deflation :rolleyes:

If the housing market crashes too quickly the banks are bust all over again and UK PLC is back on the ropes.

The BoE is there to pretend inflation isn't a problem while continuing the job of transferring the wealth of the saver to the borrower via the greasy palm of the banks and banksters who are pocketing most of the difference.

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I believe that eventually we'll end up having an ERM moment as they continue to try to fight reality but the real world gives them a nasty punch on the nose, either in the form of the bond markets forcing rates up or, if they manage to continue to fudge rates lower with more QE, inflation lets rip and gives the economy the kicking it is due in that way instead.

Agreed, something is going to blow before much longer as none of the underlying issues are being fixed.

I see our economy a bit like a dam that has been badly built and as a result has sprung the twin leaks of a house price crash and an economic crash. They've stepped in and plugged the leaks with the 'two-hands' of QE and ZIRP, but because the whole structure in fundamentally unsound, blocking the leaks in the dam only serves for the dam to pop more holes, e.g. currency devaluation and inflation, and with only two hands available to plug holes, the BoE is ultimately doomed to fail in maintaining the integrity of the dam.

The dam needs to be taken out with a RPG so the dead wood can be taken out with it. Only then can we rebuilt from scratch on sound foundations and with sustainable materials. That won't happen though, the build-up will be allowed to continue until the whole country gets washed down stream in one almighty bust.

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Rate rise very possible I think. Very solid numbers from January, further evidence on huge input cost pressure in manufacturing. Martin Wheale has already gone. The only reason not to raise rates are Q4 GDP "numbers".

I would hope the MPC are smart enough to realise this number is total BS and will likely be revised to a positive number, in line with the PMI data from the quarter. I think there is a good case to scrap this early GDP estimate as it is far to inaccurate.

The ONS have some serious questions to answer with this figure as they changed their normal methodology to produce this number. It strikes me those producing the stats may have some VI in manipulating the data. If they had followed their usual methodology I am convinced the number would have been positive and broadly in line with the consensus forecast.

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An interest rate rise will mean higher mortgage payments while continued inflation will mean higher costs for your weekly shop. Either way people are getting poorer and the HPC gets closer.

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  • 312 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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