interestrateripoff Posted August 7, 2013 Author Share Posted August 7, 2013 http://www.bankofengland.co.uk/publications/Pages/news/2013/096.aspx The guidance linking Bank Rate and asset sales to the unemployment threshold would cease to hold if any of the following three ‘knockouts’ were breached:· in the MPC’s view, it is more likely than not, that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% target; · medium-term inflation expectations no longer remain sufficiently well anchored; · the Financial Policy Committee (FPC) judges that the stance of monetary policy poses a significant threat to financial stability that cannot be contained by the substantial range of mitigating policy actions available to the FPC, the Financial Conduct Authority and the Prudential Regulation Authority in a way consistent with their objectives. Basically then it will remain in place because we just made the above 3 conditions up as it all depends on what we feel like! Quote Link to comment Share on other sites More sharing options...
durhamborn Posted August 7, 2013 Share Posted August 7, 2013 This raises and interesting question over the 7% employment figure, is that full time / part time / zero hours contract target? If you have under 7% and lots of people working part time or on zero hours increasing interest rates when this threshold is reached may not be a wise idea. And they have they picked 7% where the feck has that figure suddenly appeared from, someone plucked it out of their a$$? 7% is easy to fiddle both sides.Want it higher kick more off ESA and income support and tax credits,want it lower sanction more people,stop kicking people off ESA etc. Its complete rubbish hes talking.That 7% should have no bearing on rates/QE,,its just an excuse not to tighten. Yes we know your groceries and fuel are through the roof but we need to get unemployment down.(keep asset prices high) Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted August 7, 2013 Share Posted August 7, 2013 I don't think Steve Baker, Conservative Wycombe, had better go hill walking Radio 4, World at One. On or around 13.15, not on iPlayer yet An encouraging commentary and listen if you think no one gets it Quote Link to comment Share on other sites More sharing options...
zugzwang Posted August 7, 2013 Share Posted August 7, 2013 7% is easy to fiddle both sides.Want it higher kick more off ESA and income support and tax credits,want it lower sanction more people,stop kicking people off ESA etc. Its complete rubbish hes talking.That 7% should have no bearing on rates/QE,,its just an excuse not to tighten. Yes we know your groceries and fuel are through the roof but we need to get unemployment down.(keep asset prices high) They should have called it forward misguidance. Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted August 7, 2013 Share Posted August 7, 2013 The Beeb has a feature on Canada linked to this story, starring Canada's housing boom http://www.bbc.co.uk/news/business-23579905 Quote Link to comment Share on other sites More sharing options...
planit Posted August 7, 2013 Share Posted August 7, 2013 If you read the BoE doc behind this the MPC can act on three kick-out clauses that essentially mean a revert to normal policy. If inflation pips 0.5% above target, there is doubt around inflation generally, or another unforeseen threat to financial stability occurs. Exactly, I read this as hot air, nothing has really changed at all but it is designed to make the markets gain confidence. Since everything is 80% confidence and 20% know-how it could be a good plan Quote Link to comment Share on other sites More sharing options...
zugzwang Posted August 7, 2013 Share Posted August 7, 2013 At least Carney's lived down to our expectations. So when do we think the next QE extension is due? I'll stick with September. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 7, 2013 Share Posted August 7, 2013 At least Carney's lived down to our expectations. So when do we think the next QE extension is due? I'll stick with September. I wouldn't agree with that, he's basically said nothing other than a load of sound-bites for the BBC to replay out of context. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted August 7, 2013 Share Posted August 7, 2013 (edited) The cynic in me can't help thinking that for the first time ever the government will be trying to fiddle the unemployment number to the upside. As long as they can get it in the range between the circa 8% when they came to power (so they can claim recovery) and 7% that works perfectly for them. Office for Budget Responsibility March forecast - new MPC target level reached in 2017. Its forecasts are 7.4% for 2016 and 6.9% for 2017. The unemployment situation has allegedly improved since that march forecast but not enough to indicate an possibel policy change pre-election. Edited August 7, 2013 by koala_bear Quote Link to comment Share on other sites More sharing options...
winkie Posted August 7, 2013 Share Posted August 7, 2013 They should have called it forward misguidance. They should of said no raise in interest rates for the foreseeable future or until circumstances change that circumstance depends on what flavour of the week it is when it arrives if it arrives......anything could happen at any time, when the time is right. Do you have to be registered at the job centre to be part of the unemployment statistic?....if so there are many thousands of people that are not registered so in that case they are not retired, not working or not unemployed. Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted August 7, 2013 Share Posted August 7, 2013 His speech and criteria have enough holes to be as meaningless and weaselly as anything Dave or George would say. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted August 7, 2013 Share Posted August 7, 2013 So pound up and FTSE down after he finished? Quote Link to comment Share on other sites More sharing options...
koala_bear Posted August 7, 2013 Share Posted August 7, 2013 Hasn't come up in discussions lately (months) but what are HPCers views on the (size of the) UK output gap as this has a significant effect on the unemployment rate and the speed at which jobs can be added (provided everything else is positive). Is Carney just effectively targeting reducing the output gap (the theoretically easier bit)? As trying to reduce unemployement below that level could be similar in effectiveness to head butting a brick wall... Quote Link to comment Share on other sites More sharing options...
koala_bear Posted August 7, 2013 Share Posted August 7, 2013 His speech and criteria have enough holes to be as meaningless and weaselly as anything Dave or George would say. Pretty much... Quote Link to comment Share on other sites More sharing options...
R K Posted August 7, 2013 Share Posted August 7, 2013 cable trading around 1.5500 #fail Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted August 7, 2013 Share Posted August 7, 2013 From 12"44s and for 3 enjoyable minutes Steve Baker (Con, Wycombe) takes Government policy, Carney and the BoE to task Ending with "These continual policies of kicking the can down the road are not, in fact, helping people" Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted August 7, 2013 Share Posted August 7, 2013 cable trading around 1.5500 #fail Any particular reason why your using archaic trader lingo that hardly anyone would understand without googleing it ?. Quote Link to comment Share on other sites More sharing options...
council dweller Posted August 7, 2013 Share Posted August 7, 2013 Carney should be paid under a zero hours contract I think....of course waiting around for 3 or 4 years for the phone to ring maybe a bit of a pain but at least he can sell the Big Issue to make some cash. Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted August 7, 2013 Share Posted August 7, 2013 (edited) Just heard a comment by Osbourne, which, to paraphrase not too unkindly, said: "Low interest rates going forward are great because it enables people who can't afford to buy stuff to buy overpriced stuff and so be happy, and vote for us". And a comment by Carney, which said (his in italics) "while low interest rates would not be welcome by those with significant savings, the fact that people who can't afford to buy overpriced stuff can now get it means, a strong economy will benefit everyone" [Edited to correct Carney's quote] Edited August 7, 2013 by LiveinHope Quote Link to comment Share on other sites More sharing options...
MrPin Posted August 7, 2013 Share Posted August 7, 2013 Loads of people who borrowed too much, will be crapping themselves when the employment figures improve! Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted August 7, 2013 Share Posted August 7, 2013 The BBC are doing my head in with their incessant spin. They're running an article about how good low interest rates are for businesses. Well, that's not true for all businesses. I used to run my company with positive cashflow and always did rather well when my competitors couldn't borrow the money they needed to operate at a loss and undercut me. Quote Link to comment Share on other sites More sharing options...
frederico Posted August 7, 2013 Share Posted August 7, 2013 Any particular reason why your using archaic trader lingo that hardly anyone would understand without googleing it ?. I'm very grateful as was wondering what it meant Quote Link to comment Share on other sites More sharing options...
frederico Posted August 7, 2013 Share Posted August 7, 2013 Loads of people who borrowed too much, will be crapping themselves when the employment figures improve! Indeed, they don't care about Mr average at all. Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted August 7, 2013 Share Posted August 7, 2013 (edited) It will be interesting to see how low savings rates go. Considering the ageing population people may decide it is not worth the hassle of holding near zero interest bearing deposits in a bank. Best case funds pour into ns and i (gov can transfer back). Worst case the cash goes under the bed! Edited August 7, 2013 by Ash4781 Quote Link to comment Share on other sites More sharing options...
onlyme2 Posted August 7, 2013 Share Posted August 7, 2013 So all that money and all there is is another goldman monkey apeing fed policy. You could do that for no cost - sack the lot of them and there would be no dofference. They couldn't hit their inflation target. They screwed up financial stability so no they are tryiing to hit three targets. Doesn't bode well for jobs. Quote Link to comment Share on other sites More sharing options...
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