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Bank Of England Governor Casts Doubts On Slowdown

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sorry if someone else has already posted .....

Bank of England governor casts doubts on slowdown

http://news.ft.com/cms/s/0d3ee8a8-3a85-11d...000e2511c8.html

"...As far as any member of the monetary police committee can go in public, they were a clear signal of his view that economists and investors had got it wrong when they predicted more interest rate cuts in the near future..."

Fascinating

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What a battle that must be going on in the MPC. Brown appointees against the economists. The likes of Merv King will know that rising inflation will see many out a job, the other simply care about pleasing their masters at any price.

I'm still betting on a IR cut.

:(

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I think that Merv has probably been worried about the consumer binge for ages, but his masters at the Government wanted the property bubble to make people feel good, so that is what happened.

Still when the s**t hits the fan, Merv and his committee may have to resign, but I'm sure he's got a nice pension and a house in the country somewhere. Good luck to the man, why should I care?

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sorry if someone else has already posted .....

Bank of England governor casts doubts on slowdown

http://news.ft.com/cms/s/0d3ee8a8-3a85-11d...000e2511c8.html

However..

this also appeared under the headline "bank keeps open mind on interest rates"

Policymakers need to keep an open mind about the next move in interest rates as the extent of the current economic slowdown is unclear, Bank of England Governor Mervyn King said on Tuesday.

Financial markets have become increasingly convinced the BoE will cut interest rates within the next few months, perhaps even as early as November, as economic growth has slowed sharply in the last year.

But in a speech to business leaders in Newcastle, King said recent data had been giving conflicting signals and policymakers should not rely on any one estimate of slack in the economy.

"Most important of all is the need to keep an open mind on the future path of interest rates," he said, according to the text of his speech made available in London.

Policymakers need to keep an open mind about the next move in interest rates as the extent of the current economic slowdown is unclear, Bank of England Governor Mervyn King said on Tuesday.

Financial markets have become increasingly convinced the BoE will cut interest rates within the next few months, perhaps even as early as November, as economic growth has slowed sharply in the last year.

But in a speech to business leaders in Newcastle, King said recent data had been giving conflicting signals and policymakers should not rely on any one estimate of slack in the economy.

"Most important of all is the need to keep an open mind on the future path of interest rates," he said, according to the text of his speech made available in London.

Policymakers need to keep an open mind about the next move in interest rates as the extent of the current economic slowdown is unclear, Bank of England Governor Mervyn King said on Tuesday.

Financial markets have become increasingly convinced the BoE will cut interest rates within the next few months, perhaps even as early as November, as economic growth has slowed sharply in the last year.

But in a speech to business leaders in Newcastle, King said recent data had been giving conflicting signals and policymakers should not rely on any one estimate of slack in the economy.

"Most important of all is the need to keep an open mind on the future path of interest rates," he said, according to the text of his speech made available in London.

http://news.money.msn.co.uk/article.aspx?a...=10&ml=ma&lc=en

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On page 5 he says 'inflation will for a short while be above target'

This is the man with the data and the man with the model

This is surely dynamite (although not unexpected)

He quotes Don Kohn one of the governers of the Fed "policy makers should be cautious of repsonding agressively to estimated movements in economic slack"

In summary, considering it's a speak to business men it says to me 'unlucky if your struggling, there's inflation coming and that's our first priority'

I dont read interest rate rises but no falls either.

Edited by uro_who

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The full speech:

Link

And it's a belter B)

oooooh boy!!!!

did you see that little bit about "stimulating domestic demand to compensate for weak external demand"

......that pretty much says it all!!

why do interest rates get CUT????.....erm to stimulate DOMESTIC demand....precisely what happened last decade as asia and germany went to the dogs(after roaring away in the 80's!....which were a time of IR increases!)

..........ok so what happens when EXTERNAL demand picks up again?????

.....hmmmmm,tough one isn't it?!!!

we ARE in another 1975-1989 cycle.

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Both inflation and output may be somewhat more volatile than the calm waters to which we

had become accustomed. And the MPC can do little to change that. Expectations of its

ability to stabilise the economy must be realistic.

Ahhh, you're pressing all the right buttons Merv...

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Absolutely fantastic.

The man has in the past been a professor of economics at MIT, Harvard, and the LSE.

And this is the type of speech I would expect of such a man, and current governor of a central bank.

Very,very good indeed.

Probably worth keeping a copy for future reference.

I am also extremely happy that someone of his stature has finally come out with the truth about the state of the UK economy.

Congratulations to the man.

Edited by BandWagon

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Very,very good indeed.

I have just read it in full, and have to agree it's good stuff. I like the bit about 'rebalancing' the economy away from consumerism and back into business investment.

His balanced assessment makes groups such as the BRC look like children throwing toys out of their pram. Also it's kind of preparing us for some fairly dodgy times ahead, and the MPC are not the people who are going to wave the magic wand.

Is Mervyn coming out as a bear ?

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Yes, but he's still out-voted!!!

so that basically means rampant inflation ahead,with the prospect of massive outsourcing of jobs,and serious under-investment in domestic UK....while gaining tax-revenue from our FTSE listed global companies.

.....ohhh bugger!

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Am I right in thinking that this is Mervyn's signal that IRs aren't going to fall to 3.5% next year? That the MPC(as far as he can persuade it) will not lose its nerve and do its primary job on keeping inflation low?

Thoughts? If this is true, this is very important...

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so that basically means rampant inflation ahead,with the prospect of massive outsourcing of jobs,and serious under-investment in domestic UK....while gaining tax-revenue from our FTSE listed global companies.

.....ohhh bugger!

Yep. And the British people won't wake up from their stupor until it's way too late, or even worse...until Brown is PM!

Nooooooooooooo!

:huh:

Edit: Inflation is probably the only way we can get out of our debts.

Edited by Golden Shower

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Yep. And the British people won't wake up from their stupor until it's way too late, or even worse...until Brown is PM!

Nooooooooooooo!

:huh:

.....well we already knew the majority of people were pretty thick.

I hope this doesn't happen....because people with jobs would start to feel mighty pleased about 5%+ pay rises,even though stealth taxes would take it all away,and then some!

nobody better off,but some would interpret it as such.

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This is a central banker's speech par excellence. It is an ideal forum (regional forum, bound to be reported but only picked up by the economically literate/advanced and the markets - not the plebian press).

If this had been the US and a Greenspan speech the market would be reading interest rate hold (minimum) or rises (probable) in the medium term.

Can someone with access to market pricing tomorrow confirm the effect of this (if any) on long term interest rate futures. I fancy a small rise.

Edited by Tempest

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  • 301 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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