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http://www.bbc.co.uk/news/business-12828427

Bank of England policymakers voted 6 to 3 in favour of keeping rates on hold at a record low of 0.5% this month, minutes of March's Monetary Policy Committee (MPC) meeting show.

Hawks Spencer Dale, Martin Weale and Andrew Sentance were unable to win other members over to their side.

There have been some calls for a rise with the Consumer Prices Index showing an annual rate of 4.4% in February.

And the Bank has now warned that inflation could now exceed 5%.

'Significant risk'

Worries are growing about the recent pick-up in inflation, boosted by rising commodity prices and January's VAT increase.

Releasing the minutes of its March meeting, the Bank said there was a "significant risk" inflation could exceed 5% in the coming months.

But, keeping rates on hold, the Bank said it still thought that inflation would fall back in the medium-term.

However, it pointed out that the recent rise in oil prices, fanned by tension in the Middle East and North Africa, had increased adverse risks to both inflation and growth.

That, it said, could have a knock-on effect which could affect businesses and investor confidence.

After the announcement sterling fell by 0.47% against the dollar to $1.62960. It also fell against the euro by 0.39% to 1.14870 euros.

However, the London stock market which had been braced for a more hawkish outcome, picked up and was ahead by 0.5%, or 29 points, at 5791.73.

'As expected'

The MPC added that while recent information on the prospects for UK trade had been encouraging, there was still some uncertainty.

The committee said "it was not yet clear that the weakness in output growth seen in the latter part of 2010 would prove temporary, particularly in light of the latest indicators of a further weakening in consumer spending".

The unchanged 6-3 result to keep interest rates at a historic two year low did not surprise analysts.

"It's broadly as expected," said Ross Walker, of RBS Financial Markets.

"We didn't expect any more dissenters this month. It's the same dilemma, weighing up competing risks of rising inflation versus still weak activity numbers."

'Not appropriate'

Bank chief economist Mr Dale and external MPC member Martin Weale both again voted for a rise to 0.75%.

And Andrew Sentance maintained his call for an increase to 1%.

"Other members concluded that an increase in Bank Rate was not yet appropriate," the Bank said.

Meanwhile, Adam Posen was again a lone voice calling for an additional £50bn of quantitative easing.

Edited by exiges

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its logical.

Inflation is NOT being caused by borrowing on the part of the public, QE is doing the job for us.

They really have run out of "tools"......

Edited by Bloo Loo

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its logical.

Inflation is NOT being caused by borrowing on the part of the public, QE is doing the job for us.

They really have run out of "tools"......

There are plenty tools in the MPC and the government. :lol:

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its logical.

Inflation is NOT being caused by borrowing on the part of the public, QE is doing the job for us.

They really have run out of "tools"......

what 'tools'?

they've only got one tool - print money

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what 'tools'?

they've only got one tool - print money

They have the tool of war...and the tool of letting the system collapse, civil unrest and starvation/opression of the masses. The only tool the masses has is rebellion.

It's all a bit of a mess, i'm hoping to be elsewhere when it all goes pop, not much worth staying around the UK anymore, it is clearly on a downward path socially, economically, every way possible in fact/

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what 'tools'?

they've only got one tool - print money

I've said this before.

The right wing attacks on any kind of tax rise in many an election campaign has made the use of taxation unavailable as a tool to control the economy. At least, not if you want to win the next election.

The deregulation of bank lending has placed so many in debt that interest rate rises would also amount to electoral suicide.

The cuts program has already set our economy on a downwards path and any further intervention to slow down inflation will also lead to a deep recession followed by a drubbing at the polls.

High RPI/CPI inflation coupled to little or no wage inflation will also cause this government's poll ratings to nosedive.

They are fooked. Sadly they will take the rest of us down with them.

Edited by Nickolarge

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It's all a bit of a mess, i'm hoping to be elsewhere when it all goes pop ...

I remember reading a theory long ago that no nation 90% of whose population owns a television set will ever have a revolution. I'm not sure why this should be, but it seems to be true. I don't think it will ever go 'pop'. Maybe a few marches, localised riots etc., but no 'pop'.

I'd love to believe otherwise, though ...

:)

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I remember reading a theory long ago that no nation 90% of whose population owns a television set will ever have a revolution. I'm not sure why this should be, but it seems to be true. I don't think it will ever go 'pop'. Maybe a few marches, localised riots etc., but no 'pop'.

I'd love to believe otherwise, though ...

:)

Have a television or have access to one? I can imagine many Egyptians watch TV and even more Tunisians...

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Have a television or have access to one? I can imagine many Egyptians watch TV and even more Tunisians...

No Eastenders,Corrie,Sky Sports or page 3 in Tunisia/Egypt = the masses are in a non-vegatitive state.

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No Eastenders,Corrie,Sky Sports or page 3 in Tunisia/Egypt = the masses are in a non-vegatitive state.

But soap operas are huge in Egypt (especially during Ramadan...). And there are plenty of equivalents to Page 3.

Nope, almost any country will revolt when pushed far enough.

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its logical.

Inflation is NOT being caused by borrowing on the part of the public, QE is doing the job for us.

They really have run out of "tools"......

Bloo,

I think it goes further. Many people in society - pensioners, rich people, etc. want to have assets so they can be rich. The money they hold has to be someone else's debt. For a decade the mortgage bubble created lots of debt, and lots of wealth (positive savings balances for the rich). Recently that has stopped, people simply aren't willing to borrow enough moeny to create sufficent positive balances for those becoming richer. The government steps in and runs a deficit budget - creates gitls. They are borrowing on our behalf.

Very telling last week, chap from OECD talking about Japan on Today programme, said that Japan has lots of wealthy savers, and lots of government debt. Went on to say that given the money needs to be spent in Yen, then only Japanese savers can lend the money. Rather proves my point.

The purpose of government is to run a deficit budget to create debt (on our collective behalf)so that we can hold it as individual wealth. Of course it nets off to zero, but that doesn't matter so long as people want crisp £10 notes, or gilts, or premium bonds, etc.

The government have to pretend they can't just create the money, that the QE is temporary, that cuts are more important than jobs, anything to maintain the illusion that they aren't just printing the stuff.

Why do they get away with this appalling con? Simply because we (savers) have a demand for government and the government respond by expanding.

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Have a television or have access to one? I can imagine many Egyptians watch TV and even more Tunisians...

I think the key word is "own", and not 'watch'. When 90% of a population owns a television, that country becomes incapable of revolution.

I'm happy to be proved wrong - so show me an example.

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No Eastenders,Corrie,Sky Sports or page 3 in Tunisia/Egypt = the masses are in a non-vegatitive state.

People are pretty much equally stupid in all countries. They just happen to be stupid about slightly different things. This is sometimes known as 'culture'.

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I think the key word is "own", and not 'watch'. When 90% of a population owns a television, that country becomes incapable of revolution.

You may be right, but I disagree that that's anything to do with televisions; it's more to do with the (perceived) wealth / standard of living. So you could equally say "when 90% of the population owns a fridge, that country becomes incapable of revolution".

I would say that when 90% of a population owns a television, that population tends to become deeply unhappy (because fantasy becomes confused with reality). But I don't think mass media penetration precludes the possibility of revolutions - in fact, I reckon it can help to trigger them. I think you're confusing the medium with the message?

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its logical.

Inflation is NOT being caused by borrowing on the part of the public, QE is doing the job for us.

They really have run out of "tools"......

QE is caused by borrowing. The banks lend money into existence, go bust when the creative accounting hits a bump, and the rest is queezing.

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I think the key word is "own", and not 'watch'. When 90% of a population owns a television, that country becomes incapable of revolution.

I'm happy to be proved wrong - so show me an example.

Could there be a clue in Marx: nothing to lose but their chains?

People with TVs are, by historic standards, very rich. They have something to lose.

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I've said this before.

The right wing attacks on any kind of tax rise in many an election campaign has made the use of taxation unavailable as a tool to control the economy. At least, not if you want to win the next election.

The deregulation of bank lending has placed so many in debt that interest rate rises would also amount to electoral suicide.

The cuts program has already set our economy on a downwards path and any further intervention to slow down inflation will also lead to a deep recession followed by a drubbing at the polls.

High RPI/CPI inflation coupled to little or no wage inflation will also cause this government's poll ratings to nosedive.

They are fooked. Sadly they will take the rest of us down with them.

There was a time when I would have posted something like this and loads of you lot would have jumped all over me.

Could it be that you have finally seen the light? :P

Edit to add - Retail sales figures down again. More than expected by so called financial experts.

This government is dead in the water as far as economic competence is concerned.

Edited by Nickolarge

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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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