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Bank Of England Governor Sir Mervyn King To Issue Seventh Inflation Apology In A Row

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http://www.telegraph.co.uk/finance/economics/interestrates/8699945/Bank-of-England-Governor-Sir-Mervyn-King-to-issue-seventh-inflation-apology-in-a-row.html

Sir Mervyn King will this week write his seventh successive letter to the Chancellor, and his 12th in total, explaining why inflation remains so far above target.

The quarterly correspondence between the Governor of the Bank of England and the Chancellor has become a regular event as inflation has been above target for most of the last three years. The Office for National Statistics is expected on Tuesday to reveal that the consumer prices index of inflation in July was 4.3pc, a slight increase on June's 4.2pc but more than double the Bank's 2pc target.

The Governor has to explain why the Bank is not responding if inflation moves more than one percentage point above or below the target.

Last week, Sir Mervyn repeated that the Bank now expects inflation to rise above 5pc in the next few months before coming down sharply next year. He is expected to explain in his letter that underlying inflation in the UK is very weak, with most of the price rises caused by external factors, and that in the medium term inflation will be back in the target range.

Economists even expect Wednesday's release of the minutes to the Bank's Monetary Policy Committee (MPC) meeting a fortnight ago to show that one of the two members still voting for a rate rise – Spencer Dale and Martin Weale – may have moved position and rejoined the majority camp calling for interest rates to be left on hold. The worry is that a rate rise to curb over-target inflation could undermine the fragile recovery and would do little to tackle the global pressures, such as the cost of oil, which have helped drive up British prices.

Luckily 7 times in a row doesn't mean you're a complete failure.

As he's not on a performance related bonus none of this matters.

May the farce continue.

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A TREDEGAR-based company that has been providing jobs in the town for over 40 years has gone into administration.

The decision was made to put BKF Plastics Limited into administration on August 2, with 19 of the 39 staff already made redundant.

Through providing plastic moulds for the furniture industry, stadium seating and items that are continually exposed to the outdoors, the company has generated a turnover of £2.5 million.

While it traded profitably since being set up in 1969, it ran into trouble in 2010 because of an increase in raw material prices and experienced cash flow problems at the start of 2011.

Administrator Grant Thornton UK is hopeful of selling the business, but because of a limited order book, has laid off 19 staff.

The company has assets that include 17 plastic injection moulding machines ranging from 60 to 1,000 tonnes in weight.

http://www.southwalesargus.co.uk/news/gwentnews/9191781.Jobs_blow_at_Tredegar_factory/

Yep week £ helping business.

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it is entirely right - wiping out boomer wealth and youhtful debts, an effective transfer of wealth from old to young

Osborne and King go hand in hand correcting a great wrong, smart men

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it is entirely right - wiping out boomer wealth and youhtful debts, an effective transfer of wealth from old to young

Osborne and King go hand in hand correcting a great wrong, smart men

I follow your logic but I'm not sure it's quite that clear cut.

High monetary inflation would surely transfer wealth from savers to asset holders (with some redistribution via taxation on "profit").

There are situations where you have young savers and old asset holders. In these cases the debt of the older generation is being forgiven at the expense of the younger.

If you (are able to) simply allow asset bubbles to correct, then this relationship would change to punishing people who malinvested, in favour of those who invested sensibly.

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Official statistics hide true increase in cost of living

"Consumer prices index is misleading, economists say"

Who'da thunk it?

You actually made me larf Bart - i'll tell you why!

Cameron is spouting off against the unrulies helping themselves to few luxury goods blah blah

UK Govt action to crack down on everybody - releaving you of yet more illusory freedom?/human rights

Yet the Govt tossas now base the biased CPI etc "shopping basket" on such luxury goods so the pipers can fiddle ordinary citizens by paying less out to ex-"hard working" pensioners and no-hope-of-decent-employment doleys.

Edited by erranta

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I've written countless emails to Mervyn King and I'm pretty sick of it.

Why they cant raise the base rate enough so savers rates are above inflation is beyond me.

The policy seems to be "Look after the over borrowers and stuff the prudent" MPC

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I've written countless emails to Mervyn King and I'm pretty sick of it.

Why they cant raise the base rate enough so savers rates are above inflation is beyond me.

The policy seems to be "Look after the over borrowers and stuff the prudent" MPC

The Bank of England believe that people with savings all own houses.

They are robbing savers of income but by low interest rates they helping to protect the value of their house.

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The Bank of England believe that people with savings all own houses.

They are robbing savers of income but by low interest rates they helping to protect the value of their house.

Nah - that's the visible side of it!

They are protecting rich elite Bank owners and shareholders wealth/City folks bonuses

whilst they loot the last of the UK's taxpayers (& others) wealth

whilst they run their banks as Usury, empty, broken shells!

Edited by erranta

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This is from someone on the MPC

While the income of people in your situation is temporarily lower than ideally it might be, the accumulated wealth of your generation is in large part due to the combination of transfers of debt to younger people and of stability policy from the Bank of England. Thus, while savers are being squeezed now unavoidably, they also benefitted unavoidably from other policies up until now. We all have to take a share.

Which I take it to mean savers have to contribute now because the of previous policies that blew up an asset bubble.

When he sent me that he did not know how old I was or whether I owned property. It was assumed that because I had savings I must be old and an house owner.

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This is from someone on the MPC

Which I take it to mean savers have to contribute now because the of previous policies that blew up an asset bubble.

When he sent me that he did not know how old I was or whether I owned property. It was assumed that because I had savings I must be old and an house owner.

The accumulated wealth is an illusion as they now absorb it back into the system when you get old.

Your real earned 'wealth' has been usurped over the 25-30 Mortgage - rest is an aspiring illusion just like false USA dream (unobtainable by over 90% of the population)

The bankers then off-load the debts onto the next generation of workers (just like their PFi fraud on the population - they get the fees and bonuses for arranging the Billions in the present and disappear off the scene within a decade )

Edited by erranta

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it is entirely right - wiping out boomer wealth and youhtful debts, an effective transfer of wealth from old to young

Osborne and King go hand in hand correcting a great wrong, smart men

Is this a joke?

Edited by Britney's Piers

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I follow your logic but I'm not sure it's quite that clear cut.

High monetary inflation would surely transfer wealth from savers to asset holders (with some redistribution via taxation on "profit").

There are situations where you have young savers and old asset holders. In these cases the debt of the older generation is being forgiven at the expense of the younger.

yes, however the young have longer investment outlook and should more ably be able to risk investing in assets - but I know plenty of 20 somethings heavily in cash and it is hard to persuade them

If you (are able to) simply allow asset bubbles to correct, then this relationship would change to punishing people who malinvested, in favour of those who invested sensibly.

I fully agree, but this is not politically possible, that's just all there is to it

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I've written countless emails to Mervyn King and I'm pretty sick of it.

Why they cant raise the base rate enough so savers rates are above inflation is beyond me.

The policy seems to be "Look after the over borrowers and stuff the prudent" MPC

The problem your facing is "we are all prudent now" no body wants to borrow your money (well no one that has a chance of paying it back). Why don't you go out and spend it? The borrowers have been driving the economy for years. if they hadn't borrowed you wouldn't have any savings.

Don't you think it's time the savers took over driving the economy?

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In the paper today it was suggested that markets do not expect a rise to 0.75% until 2013.

To be honest after what the Fed said that's not surprising considering the Fed said it won't increase rates till 2013. It's a good bet the UK will follow.

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The problem your facing is "we are all prudent now" no body wants to borrow your money (well no one that has a chance of paying it back). Why don't you go out and spend it? The borrowers have been driving the economy for years. if they hadn't borrowed you wouldn't have any savings.

Don't you think it's time the savers took over driving the economy?

Borrowers are forced to borrow to buy ever more expensive houses and to fund consumption. Were they to borrow to fund proper investment, you might have a point.

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Borrowers are forced to borrow to buy ever more expensive houses and to fund consumption. Were they to borrow to fund proper investment, you might have a point.

To be honest I think some of the SAVE ARE SAVERS comments are starting to grate on me.

It's that feeling of entitlement they have. They should be having free money because they as special and prudent.

Debt and savings is just the circle of life. I used to have savings I now have debt in a few years I hope to have savings again. Hopefully when I'm back in the black I wont go around calling every one feckless because they have borrowed money.

Maybe I am being to sensitive because I hate being in debt.

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To be honest I think some of the SAVE ARE SAVERS comments are starting to grate on me.

It's that feeling of entitlement they have. They should be having free money because they as special and prudent.

You can build an economy without debts, but it's pretty hard to build one without savings.

Heck, those savers are providing much of the money that banks are using to back their debts.

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To be honest I think some of the SAVE ARE SAVERS comments are starting to grate on me.

It's that feeling of entitlement they have. They should be having free money because they as special and prudent.

Debt and savings is just the circle of life. I used to have savings I now have debt in a few years I hope to have savings again. Hopefully when I'm back in the black I wont go around calling every one feckless because they have borrowed money.

Maybe I am being to sensitive because I hate being in debt.

I sympathise with savers because I do think they have the moral high ground.

But I think what was said earlier is correct. Politically the government is going to stop people being kicked out of their houses and stop businesses going bust before they give people who have already got money squirrelled away more money to squirrel away.

Rather than let the blood boil at the low rates (and let's face it from the looks of it rates are going to be low for a long time, so that's a lot of blood boiling and stress) better to appreciate the situation for what it is and make appropriate investment decisions to counter it as best possible.

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You can build an economy without debts, but it's pretty hard to build one without savings.

Heck, those savers are providing much of the money that banks are using to back their debts.

Sorry you are wrong this is how it works on a micro scale.

A man wants to sleep with a prostitute but he has no money. He goes to the bank and asks for a loan. The bank gives him a cheque.

After an exchange of body fluids the prostitute take the cheque to the bank and deposits it in her account.

at this point the transaction takes place his account is debited and hers is credited.

In this transaction no saver money was involved. in fact no money was involved. just some double entry

book keeping and some spent rubber ;)

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I sympathise with savers because I do think they have the moral high ground.

But I think what was said earlier is correct. Politically the government is going to stop people being kicked out of their houses and stop businesses going bust before they give people who have already got money squirrelled away more money to squirrel away.

Rather than let the blood boil at the low rates (and let's face it from the looks of it rates are going to be low for a long time, so that's a lot of blood boiling and stress) better to appreciate the situation for what it is and make appropriate investment decisions to counter it as best possible.

Why moral I see no difference in my morality as a saver or as borrower. If dr shipman was a saver would you say he was a moral person?

Why is it that when people hear the word saver they think of mother Teresa

Edited by gf3

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  • 343 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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