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Economy Set For Bumpier Ride-king

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http://today.reuters.co.uk/news/newsArticl...RITAIN-BANK.xml

Economy set for bumpier ride-King

LONDON (Reuters) - The Bank of England cannot fine-tune the economy and anyway targets inflation, not growth, Governor Mervyn King said on Tuesday, boosting expectations the central bank is not poised to cut interest rates again.

In testimony to a parliamentary committee, King said the economy appeared to be on course for a bumpier ride over the coming years after the remarkable stability of the last few.

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"The idea that the MPC can fine-tune the economy and can in fact ensure that the economy always seems to grow at some fixed rate every quarter is absolutely imaginary."

"I think a number of people in the last six months have been talking as if the MPC were targeting total demand or, even more oddly, targeting retail sales and consumer spending."

"We are not. We are trying to target inflation. We have an inflation target."

FACTBOX-Bank of England MPC recent rate comments, reuters, 25/10/05

Did you get that? Well if you didn't you just haven't been listening closely. He said the same thing only a fortnight ago:

It was reported by Dom here:

Bank Cannot Avert Downturn, Warns King Options , HPC, Oct 12 2005, 11:10 AM

.. in a blunt warning, he said: “Expectations of its ability to stabilise the economy must be realistic. . . There has grown up in recent years a false sense of our ability to maintain a smooth and steady growth rate of output.”

Mr King said that from 1992 the economy’s performance “might be characterised as the Great Stability”. This had fostered a view that the Bank could guarantee continuous steady growth.

But the Governor said such a belief was false. “The business cycle has not been abolished,” he said. He pointed to his earlier warnings that the Bank’s past strategy of stimulating consumer demand to boost growth “carried the risk that there could be a sharp correction to . . . consumer spending”.

That risk had now materialised.

From Bank cannot avert downturn, warns King

The Times October 12, 2005

Edited by Sledgehead

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Most stop-go problems that Britain has suffered in the last fifty years have been led or influenced by the more highly cyclical and often more volatile nature of our housing market.

Gordon Brown

If you read HPC on a regular basis, you're probably ahead of the crowd.

We've had the boom, now we're entering the bust.

Edited by BandWagon

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If you read HPC on a regular basis, you're probably ahead of the crowd.

We've had the boom, now we're entering the bust.

About bloody time too! :)

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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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