The Bank Of England Clueless Thread

[interestrateripoff]

Bank of England's Dale says 2014 rate rise very unlikely

The Bank of England is very unlikely to raise interest rates next year as it wants to see a period of sustained growth first, its chief economist Spencer Dale said on Friday.

"I think its very unlikely that we will raise Bank rate in 2014. We need to see sustained period of strong growth," Dale said on micro-blogging platform Twitter.

I think it's time we had a BoE thread to put all the duplicitous announcements on!

[interestrateripoff]

Interest Rates May Rise Next Year, Says Bank Of England Chief Economist

17 October 2013

Future Boe Deputy Governor Sees No Uk Housing Bubble

14 October 2013

Boe Delayed Disclosing Bank Capital Details because it feared there could be a loss of confidence

08 October 2013

Bank Of England Calls For Assessment Of Interest Rate Rises On Borrowers

26 June 2013

Just some of the other threads I've found after a quick search.

[zugzwang]

We need to get these dyscalculic charlatans to tell us:

1. How do they measure housing affordability?

2. What metric do they use to establish when prices are overheating?

Edit for speeling.

Edited October 18, 2013 by zugzwang

[billybong]

Whose turn is it in the BoE to now say that rate rises are likely in 2014 - or even late 2013.

Shenanigans beyond a joke now.

Edited October 18, 2013 by billybong

[Venger]

18 October 2013 Last updated at 19:10

Bank of England says rate rise unlikely in 2014

The Bank of England's chief economist, Spencer Dale, says economic conditions are unlikely to improve enough to merit a rise in interest rates next year.

Mr Dale is one of the nine people at the Bank that set monetary policy.

Mr Dale replied:"QE not evil. Has helped to support economy and protect jobs."

http://www.bbc.co.uk/news/business-24582283

QE required to protect jobs, stop bad companies falling, and prevent good money coming in. Trying to force new entrants to compete against the protected zombies, those who'd made bad mistakes, their businesses valued at more than would otherwise be the case but for QE, and inefficiency.

No wonder well positioned corporates businesses in the West stay sat on their $£ trillions, whilst 'try and protect jobs' policymakers make dig about them sat on 'dead money' they should be investing.

That fear is complicating efforts by the Federal Reserve to spark economic activity. The Fed's traditional approach is to lower interest rates, which makes it easier for companies to borrow money to hire workers or invest in their businesses. But with interest rates at historically low levels, companies are postponing spending not because of borrowing costs but out of fear of another financial crisis. "The idea that these guys are going to spend this money is crazy until all this settles down," said Bill Smith, chief executive of Smith Asset Management, a New York-based investment firm. "Corporate America is much more conservative now than it's ever been," Mr. Smith said. "Only time will tell if that's a prudent thing."

[Venger]

Asked "is Quantitative Easing a necessary evil? What will be the implications on the UK's macroeconomic objectives?", Mr Dale replied:"QE not evil. Has helped to support economy and protect jobs."

Another of the big economic debates in the country is whether or not house prices are rising dangerously high.

When asked if he had any concerns that there was a housing bubble, fuelled by the Help to Buy scheme which helps borrowers struggling to raise a deposit, Mr Dale answered: "A healthy housing market is good for economy. But watching carefully for overheating."

There shouldn't be, and shouldn't ever have been in the last 20 years, a single home-owner on the MPC. Should be required to STR to go on MPC.

QE protecting jobs? Including inefficient badly run BoE with their 'pinkies' and an MPC full of conflicted policy makers? MPC should consist of business-people as well, not fantasy economists, who go straight from University with their degrees in Economics to the BoE and then onto the MPC without ever having an executive job with a company where profit and loss and timing/pricing the correct investment decisions actually really matters.

Edited October 20, 2013 by Venger

[Bloo Loo]

BoE are watching in case there is a housing bubble. Currently there is no bubble, they have however failed to define (unless I have missed it) a bubble. Is a 10% per annum rise in London a bubble? Not apparently if the rest of the country rises by less than 10%. Is a 15% per annum rise in London a bubble if the rest of the country has static prices. If prices are static in London and rising by 10% in the rest of the country ie the reverse of the current situation then presumably this is not a bubble either.

Unemployment figure is 7%, inflation target is 5% 2% , so what defines a housing bubble? The BoE will not say but they are watching and will take action if they come across one.

thats easy...as they dont even need to think about prices, they measure the bubble in terms of lending costs...thus, house prices today, are the same as they were in 1994, in terms of borrowing costs/inflation.

obvious init....course, they have a blind eye on the rock and hard place of defaults v asset values.

[crashmonitor]

David Smith in the Sunday Times has led with the B 0f Es abysmal record today on inflation.

50% off target over the last eight years and currently the highest in Europe at 2.7%.

Can't get a lnk to the main article, but covered in his blog...................

http://www.economicsuk.com/blog/

[MrPin]

Isn't quite a lot of this "inflation" due to such schemes as help-to-buy! Look if the Government underwrites your deposit, doesn't the price go up by a similar amount?

[interestrateripoff]

http://uk.reuters.com/article/2013/10/20/uk-britain-boe-broadbent-idUKBRE99J03H20131020

The Bank of England has some leeway to raise record low interest rates without hitting borrowers buying homes with the help of government lending schemes, BoE policymaker Ben Broadbent said on Sunday.

The government launched a flagship loan guarantee plan earlier this month to help people buy houses, prompting criticism it could fuel a property bubble and burden buyers with unsustainable debt once rates return to normal levels.

Asked on Sky News whether he worried how borrowers will cope with higher rates, Broadbent said: "The numbers entering the scheme are relatively low. And although interest rates will at some point start to rise, you've got to remember quite how low a level we are starting from.

"I think there is a fair amount they could go up before borrowers got into great difficulties."

So next week will we get someone else saying that that cash strapped Brits can't afford rate raises? Still at least they aren't hoping discretionary spending will drive the economy forward and as consumer debt expansion is needed for GDP rate raises clearly won't dent that plan!

[19 year mortgage 8itch]

Looks like Charlie Bean is the new bad cop.

Rates likely to rise higher than in the US/EZ

[interestrateripoff]

http://uk.reuters.com/article/2013/10/22/uk-cf-britain-boe-review-idUKBRE99L0JE20131022

The Bank of England has hired external consultants to review its resources and priorities, pressing on with a modernisation drive under recently appointed governor Mark Carney.

The 319-year-old central bank said on Tuesday it had hired McKinsey to advise on a strategic review and Deloitte to advise on potential cost savings. Both reviews are expected to be concluded next year.

The 48-year-old Canadian became the first foreigner to head Britain's central bank earlier this year, succeeding Mervyn King who had been at the bank for 20 years.

Unlike King, whose background was in academia, Carney spent more than a decade at investment bank Goldman Sachs before joining the Bank of Canada as deputy governor in 2003. He was made governor of the Bank of Canada in 2008, becoming the youngest central bank governor among the G8 and G20 group of nations.

Carney has made no secret of his desire to reform the Bank of England, an institution steeped in tradition where visitors are greeted by doormen in top hats and pink tailcoats.

O god the idiot's hired management consultants...

Seems like he's distracting himself with pointless superficiality whilst Rome burns.

[interestrateripoff]

http://www.theguardian.com/business/2013/oct/23/robust-recovery-uk-economy-bank-england-mpc

Bank of England policymakers have been surprised at how rapidly growth has picked up and unemployment has fallen since the spring, raising the prospect of an earlier-than-expected rise in interest rates.

The Bank's nine-member monetary policy committee voted unanimously to leave policy unchanged earlier this month; but minutes of their meeting showed that a strong increase in employment, and upbeat readings from business surveys, had prompted them to upgrade their expectations for growth.

Discussing the upbeat jobs data released earlier this month, the minutes said: "It now therefore seemed probable that unemployment would be lower, and output growth faster, in the second half of 2013 than expected at the time of the August Inflation Report."

They described the latest news as pointing to a "robust recovery in activity" in the UK – though they also warn about the lack of the kind of rebalancing in the economy, towards trade and away from consumer spending, that the coalition was hoping for. "There is a risk that the recovery in the United Kingdom might be less well balanced between exports and domestic consumption than was ultimately needed."

No green shoots it's a "robust recovery"!

[Errol]

It's so robust that we still need emergency interest rates.

It's the smoke and mirrors recovery.

So robust that food bank usage tripled in the UK. Scotland went up 6 times higher than in 2012.

[rantnrave]

They described the latest news as pointing to a "robust recovery in activity" in the UK – though they also warn about the lack of the kind of rebalancing in the economy, towards trade and away from consumer spending, that the coalition was hoping for. "There is a risk that the recovery in the United Kingdom might be less well balanced between exports and domestic consumption than was ultimately needed."

In other words, the growth is all down to people taking advantage of the lower mortgage rates that FLS has created. With inflation running so much above salaries, the current growth will run out of steam in the near future, and they'll have to work very hard to lower IRs further. Hopefully the BoE are too daft to realise all of this and they'll confuse the sugar rush with real growth, putting up IRs around the same time as the effect of lower mortgage rates is eaten away by higher RPI. Then it'll be carnage...

[interestrateripoff]

http://uk.reuters.com/article/2013/10/24/uk-britain-boe-carney-idUKBRE99N0Y620131024

The Bank of England will make it easier for banks to get short-term access to cash, lowering the fees it charges and the quality of collateral banks need to provide, Governor Mark Carney announced on Thursday.

The easing up of liquidity provision by the BoE is a clear sign that the central bank, which now supervises lenders as well as setting interest rates, believes Britain's banks are in much healthier shape after sharply increasing their capital levels.

"Five simple words describe our approach: we are open for business," Carney said in a speech to a business audience in London.

Great news, the BoE is open for business to offer cheap money to it's bankrupt chums in the City meanwhile the productive economy can go feck itself.

[interestrateripoff]

http://uk.reuters.com/article/2013/10/24/uk-britain-boe-carney-expectations-idUKBRE99N13020131024

Bank of England Governor Mark Carney said on Thursday that he would have to see whether a recent spike in British inflation expectations would persist, adding that he did not want to raise interest rates before the economy gains strength.

"We have to see on the specific survey what persistence there is, and fortunately it's a monthly survey so we'll look at that," Carney said after a survey earlier on Thursday showed inflation expectations at a two-year high.

"We are not going to withdraw monetary stimulus until it's really gained that traction," he added, stressing that the Bank had not committed to a specific timetable for raising interest rates.

"We're using that 7 percent unemployment threshold ... as the staging post for when we reassess monetary policy and begin to think about raising interest rates," he said. "If we make it there faster because the economy's growing more rapidly, because more jobs are being created, we will then make that assessment more rapidly."

Mark needs a monthly survey, how about the yearly fecking energy price hikes you fecking muppet that appears to be suggesting inflation is out of control as they appear to be near the 10% mark year in year out. Still you've got a nice salary and 10% extra on your heating bills is feck all.

[interestrateripoff]

http://uk.reuters.com/article/2013/10/24/uk-britain-boe-miles-idUKBRE99N0PI20131024

The upturn in Britain's economy could be self-sustaining, but considerable slack in the labour market means monetary policy needs to remain loose, according to Bank of England policymaker David Miles.

"The recent rise in activity and confidence in the UK could be - I believe - sustainable and self-confirming," Miles wrote in a chapter for an e-book on forward guidance.

"What the self-confirming and stronger path for output and confidence does not need right now is tighter monetary policy."

It was not immediately clear when the chapter was written.

Reuters don't state what book this is in.

I love how he stuck in the word could, does it all depend if the BoE keeps printing....

[zugzwang]

http://uk.reuters.co...E99N0PI20131024

Reuters don't state what book this is in.

I love how he stuck in the word could, does it all depend if the BoE keeps printing....

Printing doesn't work. Bernanke promised higher growth and employment when he introduced QE, nothing happened except the price of financial assets went up. The QE cash is hoarded by banksters and rent collectors and doesn't trickle down. HTB1 is different. That's actual debt. The credit impulse from HTB1 is what's driven UK GDP up in the last two quarters. This rate of growth is unlikely to be maintained.

[Ash4781]

It looks sustainable until you dig down a few levels into the data (eg gdp and inflation). A number of large consumer retailers (business to consumer) are flagging up that household incomes are under pressure. Even Balls has mentioned this. Though debt is risk free I suppose those at the margins of house hold budgets will be burned first. Note to the express I cannot buy the paper with rising house prices.

Edit- it only needs to be sustainable to the election horizon.

Edited October 25, 2013 by Ash4781

[Bloo Loo]

Printing doesn't work. Bernanke promised higher growth and employment when he introduced QE, nothing happened except the price of financial assets went up. The QE cash is hoarded by banksters and rent collectors and doesn't trickle down. HTB1 is different. That's actual debt. The credit impulse from HTB1 is what's driven UK GDP up in the last two quarters. This rate of growth is unlikely to be maintained.

along with imputed rents....mustnt forget this valuable part of GDP.

[interestrateripoff]

http://uk.reuters.com/article/2013/11/14/uk-britain-economy-boe-idUKBRE9AD06120131114

British interest rates could eventually rise back to about 4 or 5 percent if inflation falls to the Bank of England's target and economic growth picks up, a top official at the Bank of England said on Thursday.

Paul Fisher, a member of the Bank's Monetary Policy Committee, stressed the BoE was not planning to raise interest rates any time soon.

"Eventually, if we get inflation on target at 2 percent and economic growth at say 2.5 percent, you might expect interest rates to be in the 4-5 percent range. That would be more normal," Fisher told BBC radio.

At which point they'll probably bankrupt the state with the current debt held in the name of the taxpayer. Rates aren't going anywhere.

[winkie]

http://uk.reuters.com/article/2013/11/14/uk-britain-economy-boe-idUKBRE9AD06120131114

At which point they'll probably bankrupt the state with the current debt held in the name of the taxpayer. Rates aren't going anywhere.

...Basically that is what he was implying.....trying to quell future uncertainty so that businesses and households can plan to manage and be secure and confident enough to take on high debt that would help drive up the countries growth gdp.......no rises this week then.

[fluffy666]

Printing doesn't work. Bernanke promised higher growth and employment when he introduced QE, nothing happened except the price of financial assets went up. The QE cash is hoarded by banksters and rent collectors and doesn't trickle down. HTB1 is different. That's actual debt. The credit impulse from HTB1 is what's driven UK GDP up in the last two quarters. This rate of growth is unlikely to be maintained.

Well, for printing to work at all, you have to give the printed money directly to those most likely to go out and spend it, or save it.

Then the banks actually have to compete for it.

[Ash4781]

Is the Fisher quote accurate as the mpc fan chart doesn't put the point of cpi 2% , gdp 2.5% that far off? 4-5% rates