interestrateripoff Posted January 2, 2014 Author Share Posted January 2, 2014 INTEREST RATES 0841:The Financial Times this morning reports a survey of 98 economists, half of whom think the Bank of England will move the goalposts on its interest rate guidance this year. Many of them reckoned that it would lower the unemployment rate at which it would consider raising interest rates from its current level of 7%. From the BBC. Well no 5h1t Sherlock! Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 9, 2014 Author Share Posted January 9, 2014 http://www.bbc.co.uk/news/business-25667798 The Bank of England has given no further guidance on when it might raise interest rates, after deciding to keep them on hold at 0.5% once again.There had been speculation that the Bank might have to refine its threshold for increasing rates. Back in August, governor Mark Carney said unemployment would have to decline to 7% before an interest rate rise would be considered. A surprise decision.... Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted January 9, 2014 Share Posted January 9, 2014 http://www.bbc.co.uk/news/business-25667798 A surprise decision.... Meanwhile unemployment is under 7%.....6.8% in November ignoring their 3 month rolling average and no doubt it has made further moves toward the mid sixes. But that aint going to spoil the ZIRP party, using lagging data is all part of the strategy to act too late. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted January 9, 2014 Share Posted January 9, 2014 (edited) Meanwhile unemployment is under 7%.....6.8% in November ignoring their 3 month rolling average and no doubt it has made further moves toward the mid sixes. But that aint going to spoil the ZIRP party, using lagging data is all part of the strategy to act too late. The 7% thing will show them up for the liars that we think they are. If that was their target and they had sound reasons to raise rates at that point then that what they should do. If they are targeting something else then the public need to know. ( BTW I've still not had a response from my "how do you define a bubble" question, strange that ). My opinion is they have no intention of increasing rates till is suits their banker friends. Everyone should be writing to their MPs about this. Bankers should not be in charge of policies to help bankers. Edited January 9, 2014 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
Biggus Posted January 9, 2014 Share Posted January 9, 2014 Just because their policies have not worked for the past eight years does not mean it's time to try something different. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted January 9, 2014 Share Posted January 9, 2014 Just because their policies have not worked for the past eight years does not mean it's time to try something different. I disagree, it's worked a treat, all the bankers till have jobs, get bonus, their rich friends are still rich and we're all fecked. Worked exactly as planned I'd say. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 10, 2014 Author Share Posted January 10, 2014 http://www.bloomberg.com/news/2014-01-09/how-not-to-kill-the-u-k-economy.html The Bank of England's decision to keep interest rates at an historic low disappointed pundits who had been calling for tighter monetary policy in the face of economic recovery. That's good, because to take their advice would have been an act of madness.Any interest-rate increase would have put the central bank out ahead of its counterparts in the U.S. and Europe in tightening, even though the U.K. is in no better shape. Real wages have been falling, inflation is decelerating and the country's economy is still smaller than it was in 2008. The U.K.’s third quarter growth of 0.8 percent may be encouraging, but it is just catching up with its peers. Chris Giles at the Financial Times has argued that the Bank of England will have to raise rates soon, because recent job growth has been accompanied by low productivity -- a situation that could produce inflation unless the bank acts. The informal Shadow Monetary Policy Committee, which meets at a free-market think tank, has been calling for an interest-rate increase since February last year, when there was no recovery in sight. What the policy hawks fail to recognize is how damaging a premature tightening could be. As Oxford Professor Simon Wren Lewis has noted, debt-service payments still occupy a large portion of households' budgets. In the absence of an adequate increase in income, even a small increase in interest rates could trigger defaults and foreclosures on a grand scale. Why would anyone intentionally precipitate such a crisis unless coerced by the prospect of rampant inflation? Of course we simply ignore the debt servicing cost of the govt, which I think is the bigger reason interest rates won't go up. As the govt would need to put up taxes to meet the debt service costs. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted January 10, 2014 Share Posted January 10, 2014 http://www.bloomberg.com/news/2014-01-09/how-not-to-kill-the-u-k-economy.html Of course we simply ignore the debt servicing cost of the govt, which I think is the bigger reason interest rates won't go up. As the govt would need to put up taxes to meet the debt service costs. We've already had the rampant ( deliberate ) inflation. BTW...I think your posts are the best on this whole site, you BOLD the relevant point(s) and comment ( accurately ) on them, well done. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 10, 2014 Author Share Posted January 10, 2014 We've already had the rampant ( deliberate ) inflation. BTW...I think your posts are the best on this whole site, you BOLD the relevant point(s) and comment ( accurately ) on them, well done. Flirty. Inflation has been cleverly disguised for over a decade, unfortunately now people are seeing it more and more in food and energy bills. Quote Link to comment Share on other sites More sharing options...
Errol Posted January 10, 2014 Share Posted January 10, 2014 (edited) Inflation has been cleverly disguised for over a decade, unfortunately now people are seeing it more and more in food and energy bills. Yes, and as I keep on saying, it's not just the prices but also the quality. Companies are replacing expensive ingredients with poor quality/cheap ones and yet the price remains the same or goes higher. That is why so many products now taste horrible when only a year or so ago they tasted ok (not great, but ok). Edited January 10, 2014 by Errol Quote Link to comment Share on other sites More sharing options...
Quicken Posted January 10, 2014 Share Posted January 10, 2014 Just because their policies have not worked for the past eight years does not mean it's time to try something different. Melchett: Good man. Now, Field Marshal Haig has formulated a brilliant new tactical plan to ensure final victory in the field. [they gather around a model of the battlefield] Blackadder: Now, would this brilliant plan involve us climbing out of our trenches and walking slowly towards the enemy sir? Darling: How can you possibly know that Blackadder? It's classified information. Blackadder: It's the same plan that we used last time, and the seventeen times before that. Melchett: E-E-Exactly! And that is what so brilliant about it! We will catch the watchful Hun totally off guard! Doing precisely what we have done eighteen times before is exactly the last thing they'll expect us to do this time! There is however one small problem. Blackadder: That everyone always gets slaughtered the first ten seconds. Quote Link to comment Share on other sites More sharing options...
billybong Posted January 10, 2014 Share Posted January 10, 2014 (edited) The informal Shadow Monetary Policy Committee, which meets at a free-market think tank, has been calling for an interest-rate increase since February last year, when there was no recovery in sight. It's not even UK Think Tank of the Year 2013. Edited January 10, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted January 10, 2014 Share Posted January 10, 2014 Flirty. Inflation has been cleverly disguised for over a decade, unfortunately now people are seeing it more and more in food and energy bills. Just had a letter from Scottish Power saying that they are reducing bills this year, doesn`t smell like inflation to me I`m afraid. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted January 10, 2014 Share Posted January 10, 2014 (edited) Yes, and as I keep on saying, it's not just the prices but also the quality. Companies are replacing expensive ingredients with poor quality/cheap ones and yet the price remains the same or goes higher. That is why so many products now taste horrible when only a year or so ago they tasted ok (not great, but ok). More and more products are just sitting on the shelf though, so this game is not one that the companies can win? They either provide quality at a good price, or they go bust or take profit cuts? Edited January 10, 2014 by dances with sheeple Quote Link to comment Share on other sites More sharing options...
billybong Posted January 10, 2014 Share Posted January 10, 2014 (edited) Then he should stick his fingers in his ears and wait until the risk of inflation genuinely outweighs the risk of killing the recovery with a rate increase. The day will come, in the U.K. and elsewhere, when the exceptionally stimulative monetary policies that central banks have employed since the recession can be abandoned. Hopefully, that will happen well before the next recession. We're not there yet. A bit like hoping that the corpse might recover before the next relapse. Edited January 10, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 10, 2014 Author Share Posted January 10, 2014 Just had a letter from Scottish Power saying that they are reducing bills this year, doesn`t smell like inflation to me I`m afraid. So your saying over the past 10 years your energy bills have hardly gone up, and now suddenly because of a govt tax change it's no longer inflation? Quote Link to comment Share on other sites More sharing options...
Biggus Posted January 10, 2014 Share Posted January 10, 2014 What the policy hawks fail to recognize is how damaging a premature tightening could be. As Oxford Professor Simon Wren Lewis has noted, debt-service payments still occupy a large portion of households' budgets. In the absence of an adequate increase in income, even a small increase in interest rates could trigger defaults and foreclosures on a grand scale. Why would anyone intentionally precipitate such a crisis unless coerced by the prospect of rampant inflation? Maybe, just maybe, critics of the BOE's crack pot policies have already thought of that. The clue is that we have been warning that the unwinding of the policy will be twice as painful as the recession it was supposed to prevent, but didn't actually prevent. The idea that printing money and forcing down the price of credit is appealing to the simple minded (Oxford Professor Simon Wren Lewis, for example), but past experience shows that accounting tricks do not magic real goods and services into existence. From the early reluctant and careful issues of paper we saw, as an immediate result, improvement and activity in business. Then arose the clamor for more paper money. At first, new issues were made with great difficulty; but, the dyke once broken, the current of irredeemable currency poured through; and, the breach thus enlarging, this currency was soon swollen beyond control. It was urged on by speculators for a rise in values; by demagogues who persuaded the mob that a nation, by its simple fiat, could stamp real value to any amount upon valueless objects. As a natural consequence a great debtor class grew rapidly, and this class gave its influence to depreciate more and more the currency in which its debts were to be paid. 85 The government now began, and continued by spasms to grind out still more paper; commerce was at first stimulated by the difference in exchange; but this cause soon ceased to operate, and commerce, having been stimulated unhealthfully, wasted away. Manufactures at first received a great impulse; but, ere long, this overproduction and overstimulus proved as fatal to them as to commerce. From time to time there was a revival of hope caused by an apparent revival of business; but this revival of business was at last seen to be caused more and more by the desire of far-seeing and cunning men of affairs to exchange paper money for objects of permanent value. Andrew Dickson White Quote Link to comment Share on other sites More sharing options...
Venger Posted January 12, 2014 Share Posted January 12, 2014 The government now began, and continued by spasms to grind out still more paper; commerce was at first stimulated by the difference in exchange; but this cause soon ceased to operate, and commerce, having been stimulated unhealthfully, wasted away. Manufactures at first received a great impulse; but, ere long, this overproduction and overstimulus proved as fatal to them as to commerce. From time to time there was a revival of hope caused by an apparent revival of business; but this revival of business was at last seen to be caused more and more by the desire of far-seeing and cunning men of affairs to exchange paper money for objects of permanent value. Interesting. Let's hope it's not inflation though, as the wealthy/politicians forced a correction in similar circumstances to play out, (30s) rather than see their own financial assets obliterated by inflation. They have that motive against high inflation, with savings and income in national currency, and it's a powerful one, for the wealthy, and the people they back into politics, unless bulk of their wealth is in real estate, which is unlikely. They won't be lining up to print the national debt away any time soon, unless they've cashed out and retired into another currency/country. The high inflation of the 50s 60s 70s 80s exported by the USA only tolerated by capital markets because of the even more hostile risk to capital by USSR. RBS carrying two recent stories about base rates. Different authors with different opinion. One also touches on looming rises borrowing costs. http://insight.rbs.com/content/insight/articles/decision-time-on-low-yield-corporate-debt.html http://www.rbs.com/news/2014/01/interest-and-exchange-rate-forecast.html Quote Link to comment Share on other sites More sharing options...
FallingAwake Posted January 12, 2014 Share Posted January 12, 2014 It's not even UK Think Tank of the Year 2013. So "free market" that we have a central committee to determine the price of credit. Quote Link to comment Share on other sites More sharing options...
Andy T Posted January 12, 2014 Share Posted January 12, 2014 Just had a letter from Scottish Power saying that they are reducing bills this year, doesn`t smell like inflation to me I`m afraid. 3% reduction in Jan but they put prices up in december, around 10-15% Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted February 6, 2014 Author Share Posted February 6, 2014 http://www.bbc.co.uk/news/business-26066640 bump Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted February 6, 2014 Share Posted February 6, 2014 (edited) 3% reduction in Jan but they put prices up in december, around 10-15% As I have said before, if the winters are so mild that you never put the heating on, or you are out a lot, or you just wear a jumper and keep active rather than put it on, it can go up 50% and you are not affected. My rent has only gone up £50 in 15 or 16 years, any heating I do need is easily offset against this low cost of living. Edited February 6, 2014 by dances with sheeple Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted February 6, 2014 Share Posted February 6, 2014 The more they refuse to normalise rates, the more I will use cash and spend less into the economy. The only way they will get the needed inflation is to raise wages (which they don`t have the power to do) or QE straight into sheeple banks accounts, PPI is a sly version if this, but it isn`t enough to maintain any long term momentum. Quote Link to comment Share on other sites More sharing options...
MattW Posted February 6, 2014 Share Posted February 6, 2014 I sooo wished that interest rates would creep up today. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted March 6, 2014 Author Share Posted March 6, 2014 It's close to that exciting time of the month.... Can everyone feel the anticipation? Quote Link to comment Share on other sites More sharing options...
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