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Ir Rise Vs. Inflation, Chicken First / Egg First Game?

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Sorry, my knowledge of economics is very limited and basic hence this question. Probably the more learned ones here can enlighten me.

If Interest rates rise Inflation will follow. Do you agree?

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No, the Bank of England interest rate isused as a tool to curb inflation. Interest rates will rise eventually when it is considered that the economy is starting to pick up (i.e. GDP is up, inflation is heading back towards the 2% target). If inflation "follows" that is because it was going to rise anyway, not because it is tied in any way to interest rates

Edited by Thatcherschild

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Sorry, my knowledge of economics is very limited and basic hence this question. Probably the more learned ones here can enlighten me.

If Interest rates rise Inflation will follow. Do you agree?

No. The opposite.

Inflation is money losing its value, money loses its value when there is too much of it about, there is too much of it about when borrowing is too easy, borrowing is easy when rates are low.

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Yes, where (assuming the demand exists) higher rates -> higher opportunity cost to cash -> changes to liquidity preferences & higher velocity -> more lending/investment/spending -> higher inflation.

It depends:
http://www.hussmanfunds.com/wmc/wmc110124.htm
http://www.economonitor.com/blog/2011/10/china-lower-interest-rates-higher-savings/

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2014/04/interest-rates-inflation-mechanisms.html

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If the Bank are raising it's probably because they are reacting too late to inflation in the system.

So the OP is right, the economy will be punch drunk and about to go into inflation because the comedians on the MPC didn't want to spoil the party.

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