Mark Carney Set For Interest Rate Promise To Lift Economy

[Sledgehead]

Genuine question : if Carney commits to fixing the base rate for anything more than a month, what will all these guys be doing during that period?

army of BoE statisticians who collect retail price data;

members of the MPC

Mark Carney

Should I buy shares in Spearrmint Rhino?

Should the public be told and therefore finally work it out that the BoE are unaccountable and unelected?

[R K]

Via the wonders of t'interweb

http://streamstudio.world-television.com/CCUIv3/frameset.aspx?ticket=117-118-13221&target=en-default-&status=live&browser=ns-0-0-0-11-0&stream=flash-video-400

[FreeTrader]

At the time of posting the pound is trading at 1.529 against the dollar and 1.152 against the Euro.

The FTSE-100 is 6595.

The headline 10-yr gilt yield is 2.48% and the true yield is approx 2.74%.

[R K]

At the time of posting the pound is trading at 1.529 against the dollar and 1.152 against the Euro.

The FTSE-100 is 6595.

The headline 10-yr gilt yield is 2.48% and the true yield is approx 2.74%.

Betcha by tomorrow they're exactly the same (within normal standard dev/true range)

[zugzwang]

If they are going to set interest rates for a long period ahead then they should disband the MPC and save some money.

What the hell are their aims now, inflation is too high and all the recent surveys have shown the economy is recovering yet they want to keep easing

It's not a recovery, it's a relapse.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=192380

There were fewer working days in June last year, and looking at the figures on a three month basis, both production and manufacturing is well down on the same period last year. Manufacturing is slightly higher than it was at the trough of the recession, but industrial production as a whole is actually lower.

And there's the rub, for though there is undoubtedly some kind of a recovery going on, it's not the recovery – based on business investment, exports, savings, and the "march of the makers" – the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown.

[Sledgehead]

Renting is NOT speculation on house prices. If you want to speculate on the ***ckers going down in nomimal get into spread betting. That's speculation because you have exposure to losses and gains.

Yeah, I'd be careful what you suppose to be speculation. One of our top economic minds was on the box last night (she must be, she was on the MPC, right?). She said, and I quote "we want to stop people speculating on when rates will rise."

Now I'm sure there is one wizened bond vigilante left somewhere in darkest transilvania, selling interest rate futures from his crypt, but "people" in general?

Strikes me that any spikes in yields are due not to an increase in speculation to a moderation in speculation on bonds, but wtf do i knw eh?

[FreeTrader]

[R K]

blames Gidiot for causing inflation due to administered prices.

Ha!

Strange he seems to struggle reading english. Not a patch on Merv.

Edited August 7, 2013 by R K

[FreeTrader]

[Bruce Banner]

Plenty of words for the spinners to spin and seemingly no commitment .

[Sledgehead]

So new de facto inflation taget of 2.5% and some woolly unemployment "target" set at 7%

I say target, but everyone knows you can't target unemployment with monetary policy.

I mean, just wtf?

Edited August 7, 2013 by Sledgehead

[FreeTrader]

[R K]

FTSE flat

Cable flat

He's blown it.

My god he's DULL! What was Osborne thinking?

Edited August 7, 2013 by R K

[LiveinHope]

FTSE flat

Cable flat

He's blown it.

I thought it was priceless when he said that the forward guidance didn't mean that they wouldn't alter interest rates, well 'durr'

Lots of slack, lots of factors, where's a Boris expression when you need one 'Piffle' will do.

If you don't have anything ti say., best say nothing

An underwhelming presentation and delivery for someone paid and heralding so much, I thought. Not up to speed I'd say.

I wouldn't object to a flat Cable (Vince) btw

Edited August 7, 2013 by LiveinHope

[Sledgehead]

Not only has he blown it, he's now getting into the economic details. I'm no authority, but whay he's saying about productivity, the output gap and unemployment strikes me as hand waving worthy of a goalie during a worldcup penalty shoot out.

[Sledgehead]

If you don't have anything ti say., best say nothing

quite. Personally I think has has said something, and it ain't forward guidance : it's a new inflation target of 2.5%.

[LiveinHope]

Not only has he blown it, he's now getting into the economic details. I'm no authority, but whay he's saying about productivity, the output gap and unemployment strikes me as hand waving worthy of a goalie during a worldcup penalty shoot out.

Out of his depth, or as I said above - appears not up to speed. If that was a presentation and Q&A I gave, I wouldn't expect to gain any authority.

[LiveinHope]

it's a new inflation target of 2.5%.

I think he has just confirmed that - inflation could be above 2.5% going forward, so the implicit target is to get it back to 2.5%

Edited August 7, 2013 by LiveinHope

[The Knimbies who say No]

Cheers FT, the first 'knockout' is hilarious, given the BoE's past record on forecasting.

Surprisingly vague overall, imo.

Edited August 7, 2013 by cheeznbreed

[Matt Bear]

So new de facto inflation taget of 2.5% and some woolly unemployment "target" set at 7%

I say target, but everyone knows you can't target unemployment with monetary policy.

I mean, just wtf?

Have to agree. And it is the MPC's view of inflation 18-24 months ahead which never seems to bear any relation to reality.

And the BBC headlining this as Rates Held Until Unemployment Falls - it's nothing of the sort.

[durhamborn]

He will have a long wait.Unemployment in the UK is around 20%+ if you take in all on income support,self employed cough cough tax credits,,disability around the margins,people with partner working,savings etc.

You can have 5% growth and that figure wont budge unless we see wage growth of around 80% at the bottom and benefits down 50%.Most unemployment in the UK is driven by wages rates and benefit rates.

Sounds like nothing will change until the Fed tapers and hel have to tighten then.Id expect hel use that point to say QE is over so he gets an extra year with rates at 0.5%.Saying QE is over would stop a bloodbath with sterling without having to put rates up.

[Errol]

Who is going to be taking out all these loans??

[Bruce Banner]

Have to agree. And it is the MPC's view of inflation 18-24 months ahead which never seems to bear any relation to reality.

And the BBC headlining this as Rates Held Until Unemployment Falls - it's nothing of the sort.

As I said above.... "Plenty of words for the spinners to spin".

[easy2012]

Yeah, I'd be careful what you suppose to be speculation. One of our top economic minds was on the box last night (she must be, she was on the MPC, right?). She said, and I quote "we want to stop people speculating on when rates will rise."

Now I'm sure there is one wizened bond vigilante left somewhere in darkest transilvania, selling interest rate futures from his crypt, but "people" in general?

Strikes me that any spikes in yields are due not to an increase in speculation to a moderation in speculation on bonds, but wtf do i knw eh?

That was Kate Barker, an ex-MPC member.

spec·u·la·tion (spky-lshn) n.

1.

a. Contemplation or consideration of a subject; meditation.

b. A conclusion, opinion, or theory reached by conjecture.

c. Reasoning based on inconclusive evidence; conjecture or supposition.

2.

a. Engagement in risky business transactions on the chance of quick or considerable profit.

b. A commercial or financial transaction involving speculation.

Based on the above, of course STR is property speculation.

Also, based on the above, as Mr Chairman is making reasoning of the future based on incomplete evidence - he too is speculating.

[DTMark]

How many people will think this is a commitment to keep mortgage rates low? (Somewhat rhetorical, the answer being "most people")

What will this do to the fixed-rate mortgage market?