Ecb To Raise Rates On 2.7%cpi,benny Hill Does Nowt On 4.5%

[TheCountOfNowhere]

Bankers say no to raising rates...banker friends coin in profits...bankers friends don't go bankrupt...bankers friends not strung up from lamposts.

It's now that obvious.

[Bruce Banner]

Fingers crossed for a rise in Euro rate .

[inflating]

http://uk.reuters.com/article/2011/07/07/uk-ecb-rates-idUKTRE76601N20110707

'The European Central Bank is almost certain to raise interest rates later on Thursday and will show no let-up in its insistence that governments solve Greece's debt crisis without triggering a default credit rating.

Financial markets see a quarter-point rise in the ECB's benchmark rate to 1.50 percent as a virtual certainty after the bank's recent reiterations that it is in a mode of "strong vigilance" -- code traditionally used to signal a hike.

Euro zone inflation remained at 2.7 percent in June, softer than expected but well above the ECB's target of just under 2 percent. The bank will not want to alarm markets by reversing its policy course because of Greece's troubles.

http://uk.reuters.com/article/2011/07/07/uk-britain-rates-idUKTRE7660XP20110707

'Rates to stay at record low as economy wobbles

Concern about the pace of economic recovery looks set to persuade the Bank of England to keep interest rates at rock-bottom not just this week but for months to come.

At 4.5 percent, inflation is more than double the central bank's target, but there appears little threat of a wage-price spiral.

sometimes I'm genuinely lost for words.do we or do we not have an price inflation problem?our rate is nearly double the Eurozone's.they're raising,we're not.

so,the policy of low CB rates has led to :

down

1 consumer spending

2 savers income

3 mortgage rates

4 house prices

5 employment

up

3 banker salaries.

4 BTL gross margins.

5 bank profits(given it's cheaper to borrow off the 'lender of last resort' than libor-http://www.bankrate.com/rates/interest-rates/libor.aspx?ec_id=m1021968

mmmmmmmmmmmmmm.have I missed anything out?anyone would think benny was sat on a load of bank shares and large levereaged portfolio of luxury flats in Bury.

Benny Hill was a genuinely bright, talented comedy legend whose material sold worldwide, even in Poland his shows grace the DVD shelves of many a home. I'm far from certain he'd be flattered to be compared to King. Hill brought revenue to British media companies such as Thames (now Talkback Thames). During King's reign we have had prperty bubbles and inflation and a bust, with real GDP in a sorry state.

Did Sir Merv the King say any increase in base rates would be unlikely to be passed on to borrowers, or was I dreaming? If so, there might be a tick upwards by 0.25

If not, and if the rest of the mood music was as I recall, then high noon will see the continuation of the near zero.

Other countries do indeed say they smell the stink of the inflation genie coming out of the bottle, but for some reason the UK enjoys inflation and wants more of it, I wonder why

[OnlyMe]

Other countries do indeed say they smell the stink of the inflation genie coming out of the bottle, but for some reason the UK enjoys inflation and wants more of it, I wonder why

His pension pot in inflation protected intrucments - the more inflation he creates the bigger the pot.

[Pent Up]

What are earnings doing in the eurozone at the moment? I assume it must be much much more than our 2.1% (or whatever it was?)

[VeryMeanReversion]

our rate is nearly double the Eurozone's.they're raising,we're not.

BoE have two mandates, inflation at 2% (+-1%) and financial stability.

[gf3]

Has any one considered the possibility that Mervyn King might be right?

And their own view is wrong?

[Bruce Banner]

Has any one considered the possibility that Mervyn King might be right?

And their own view is wrong?

Nope, which is why half my money is in EUR .

[inflating]

His pension pot in inflation protected intrucments - the more inflation he creates the bigger the pot.

Could be forgiven for thinking we'd slipped into some sort of system where the peasants are enslaved and walked all over while the lords and ladies eat cake all day while telling the peasants they are in fact free and very lucky not to live under such and such a regime

I see your point,but in my defence it's IRRO's thesis.At least that's what I'll argue when I'm up for some zanu luvvin.

As a postscript, I'd sleep a lot better at night if Benny was alive and was indeed the governor of the BoE, and I really mean that, that's how much confidence I have in Sir Merv. 100% guaranteed

[Pent Up]

Has any one considered the possibility that Mervyn King might be right?

And their own view is wrong?

I think he is right, but only because he is wrong.

He let inflation get too high which is destroying the economy and destroying demand. Now inflation will come back to target because we will be back in recession. No need to rIse rates anymore. It's too late.

[MrFlibble]

Could be forgiven for thinking we'd slipped into some sort of system where the peasants are enslaved and walked all over while the lords and ladies eat cake all day while telling the peasants they are in fact free and very lucky not to live under such and such a regime

It's where we seem to be heading... The sooner we get there the better, then maybe we'll have a revolution or something, or maybe we'll simply accept our new lives in serfdom.

[R K]

Trichet sets for Germany - They're in danger of triggering a domestic boom, what with all these savings they can no longer export into the PIGS.

We won't have inflation 2 years out 'cause Merv knows perfectly well China will be collapsing by then.

Trichet is doing what he did in '08 - f*cking it up.

[Pent Up]

Trichet sets for Germany - They're in danger of triggering a domestic boom, what with all these savings they can no longer export into the PIGS.

We won't have inflation 2 years out 'cause Merv knows perfectly well China will be collapsing by then.

Trichet is doing what he did in '08 - f*cking it up.

Yep I think that is what he is banking on.

[FIGGY]

How would China going under help the UK though?

[neil324]

How would China going under help the UK though?

Deleveraging and a mayor commodity bust.

Leading to inflation falling in the UK and maybe deflation.

Edited July 7, 2011 by neil324

[dances with sheeple]

Isn`t there a point where, if everyone else is doing it, they have to start rising?

[Chuffy Chuffnell]

How would China going under help the UK though?

Any delay to that authoritarian monster becoming the dominant superpower is a help to the UK!

[inflating]

Some of you falling for the old "smarter than the average bear, jam tomorrow, everything is being taken care of" column inches?

Got to admire your faith in the same source that brought bubbles, gold sold at the lowest price ever, and a bust, it's amazing - the power of positive thinking

Edited July 7, 2011 by inflating

[pathfinder]

I am sure Government expect people simply to pay more. My reaction to inflation has been to do without consumer goods, buy second hand. Worst than that it has been like reversed brainwashing. Once you adapt fairly drastically you start searching for other ways to cut out luxury spending. Then you realise it was not required, many other things that are free fill your time up. Suddenly even living off jobseekers is possible.

Retail (and with it VAT) is fked

[Bloo Loo]

the problem facing Merv is one of finesse.

He cant finnesse the economy with deft strokes of the brakes or the accelerator.

Raise rates a fraction, and a million families are in default.

Leave them as they are and inflation erodes savers and squeezes borrowers already pressed and back to default.

Lower them, and whatever is left for savers is gone from the economy and lending is likely to rise again...this time not at sensible multiples ( who can buy a house on sensible multiples?) making the economy further vulnerable to higher induced inflation as the pound falls.

He really is 5 years too late to act....in other words, he is powerless, but while he continues to bail banks, we all suffer high commodity prices.

What would happen if the BoE disappeared tomoz?

['Bart']

Has any one considered the possibility that Mervyn King might be right?

And their own view is wrong?

Nope.

Which is why I shall be buying more of the shiny stuff.

[yellerkat]

What would happen if the BoE disappeared tomoz?

We could replace the MPC with a taped message.

[Gigantic Purple Slug]

Isn`t there a point where, if everyone else is doing it, they have to start rising?

That's my opinion. But the correlation for a start is not that simple.

A lot of people wonder why the markets aren't pounding us for our high inflation rate, but the reason is IMO the UK currently looks in pretty good shape from an economic perspective compared with everyone else (despite what eveyone here says).

We control our own money, which means we can partial default rather than full default. We're not part of the euro mess (although admittedly what happens in the eurozone has a high impact on the UK). We're showing greater fiscal restraint than the US and the Tories are working hard to try to cut the spending, despite the inevitable opposition.

So from a bondholder view the UK doesn't look to bad. That may change when the US starts to change its line. Originally I thought Obama was going to kick the can down the road until at least after the next US election, after which he can start taking the pain with fewer personal consequences. But it appears that the loss of congress means he isn't going to get away with this - the timescale is just too long for him to keep the plates spinning until the next election. I can see a fairly radical change in US economic policy emerging over the next 6-12 months, which may start to convice people that the US is trying to get its act together. That will put pressure on the UK to raise rates as US debt starts to look more attractive.

If the eurozone sorts it's mess out then I can also see us having to raise rates. But I can't see this happening unless there are some pretty radical changes, like for example the Germans agreeing to take on all the greek debt and the greeks in return putting a cap on deficit spending in law. Can't see this happening myself, especially when Merkel has her own elections to fight.

It will be interesting to see the market interpretation of a eurozone default crisis. Will for example this drag the UK down as the EZ is the major trading partner, or will it enhance the attractiveness of the UK debt ? My gut feeling is that it will probably drag the UK down, as despite the Us's appalling fiscal position there will still be a safety flight to the US dollar etc and everyone else will be left short. In this scenario the UK will probably have to raise rates.

[interestrateripoff]

Benny Hill was a genuinely bright, talented comedy legend whose material sold worldwide, even in Poland his shows grace the DVD shelves of many a home. I'm far from certain he'd be flattered to be compared to King. Hill brought revenue to British media companies such as Thames (now Talkback Thames). During King's reign we have had prperty bubbles and inflation and a bust, with real GDP in a sorry state.

Did Sir Merv the King say any increase in base rates would be unlikely to be passed on to borrowers, or was I dreaming? If so, there might be a tick upwards by 0.25

If not, and if the rest of the mood music was as I recall, then high noon will see the continuation of the near zero.

Other countries do indeed say they smell the stink of the inflation genie coming out of the bottle, but for some reason the UK enjoys inflation and wants more of it, I wonder why

I'm more poking fun at the fact that Mystic Merv looks like Benny Hill and is in fact more of a economic comedian than an economist, although I think Benny Hill would have made a far more effective central banker than the current useless tw@ we've got.

Wasn't Benny Hill a bit of a spendthrift with his money?

Edited July 7, 2011 by interestrateripoff

[bomberbrown]

<br />His pension pot in inflation protected intrucments - the more inflation he creates the bigger the pot.<br />

<br /><br /><br />

You could argue, that for this reason alone he simply is not impartial enough for the job. But probably unlinking his pension, you could argue that he would not be impartial in the other direction either? What a bunch of ****!