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The Masked Tulip

Will The Boe Cut Irs On Thursday?

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I didn't want this to be lost amongst all the other threads but just wanted to see what people think about the likelihood of the BOE cutting interest rates on Thursday?

Everyone seems to be acting as if it is a foregone conclusion.

But only 2 weeks ago the BOE lot voted 8 - 1 to keep IRs on hold. Has there ever been a massive swing, in just a fortnight, from so many voting to keep rates on hold to then having a majority of people change tack and voting for a rate cut?

Or is it all FUD and they have been planning for an August cut since the BREXIT vote results? Carney seem miffed that he was not allowed a cut 2 weeks ago but then we learnt that he had voted to keep rates the same.

Thoughts?

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I'm not as confident as I was 2 weeks ago that they would hold (when everyone said they would reduce), but I still think they'll hold again. Maybe 5 to 3 or something.

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i dont think they will cut. they wont until they are in full on crisis mode. why bother cutting when talk has the desired effect. and talking alone will remain effective for a few more years yet.

just depends on how quickly things go south for the timing.

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I think they'll drop interest rates to 0.25 and have more QE/FFL type stuff.

These people don't need much persuasion to gift the wealthy (themselves) money and now they've got an excuse.

The only one thats came out and said to bide their time is Kristin Forbes.

Carney, Vlieghe, Haldane and Weale have all said something must happen, they just need 1 more from those who haven't spoken in public.

http://www.econotimes.com/Views-of-the-members-of-BoEs-MPC-242892

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Who cares? Whats 0.25%, its meaningless. It won't have any effect apart from the currency.

If they drop to 0.25 they'll drop to 0. Certainly isn't meaningless.

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Recently there was talk of the US soon increasing its rate again - so a UK reduction might be unlikely.

These days the BoE's claims, assessments, guidances and announcements are so incoherent, wild, jumbled and contradictory that a rate rise could be just as likely.

Edited by billybong

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I was wondering, as so many analysts in the media think they will cut, what the affects will be if they do not.

The Pound will strengthen. In turn, what would that do for commodities - would gold/silver fall or rise on that news? Presumably it would mean another boost for gold, silver, copper as it would the Pound stronger against the USD? Or is that wrong?

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Recently there was talk of the US soon increasing its rate again - so a UK reduction might be unlikely.

These days the BoE's claims, assessments, guidances and announcements are so incoherent, wild, jumbled and contradictory that a rate rise could be just as likely.

Yes, I felt one reason they held off is that the US is looking more and more like raising rates - at least talking about it. But then you have had Oz reduce today so... what the feck does that say about what the BOE does? I really have no idea.

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If they drop to 0.25 they'll drop to 0. Certainly isn't meaningless.

It won't have any effect on the real economy so 0.5, 0.25, 0, who cares, the policy has been proven over last 7 Years to have no effect apart from cause asset bubbles.

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It won't have any effect on the real economy so 0.5, 0.25, 0, who cares, the policy has been proven over last 7 Years to have no effect apart from cause asset bubbles.

No effect apart from causing property price bubbles.

Whats this website called again?

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Carney in his 'forward guidance' has said that rates could rise soon or they could fall or even remain the same or could fall or remain the same or rise or remain the same dependent on unemployment, under-employment, GDP grrowth or lack of GDP growth or slack in the economy or a positive reaction to brexit or a negative reaction to brexit so rates could stay the same or rise or fall dependent on inflaion growth or lack of growth or a fall in the level of inflation or rise in the rate of increase in inflation ........

Precisely.

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Carney in his 'forward guidance' has said that rates could rise soon or they could fall or even remain the same or could fall or remain the same or rise or remain the same dependent on unemployment, under-employment, GDP grrowth or lack of GDP growth or slack in the economy or a positive reaction to brexit or a negative reaction to brexit so rates could stay the same or rise or fall dependent on inflaion growth or lack of growth or a fall in the level of inflation or rise in the rate of increase in inflation ........

See its so confusing thats why he's paid so much and gets free board and lodgings.

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Carney in his 'forward guidance' has said that rates could rise soon or they could fall or even remain the same or could fall or remain the same or rise or remain the same dependent on unemployment, under-employment, GDP grrowth or lack of GDP growth or slack in the economy or a positive reaction to brexit or a negative reaction to brexit so rates could stay the same or rise or fall dependent on inflaion growth or lack of growth or a fall in the level of inflation or rise in the rate of increase in inflation ........

The answer is to cut rates, what's the question? :D

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The BoEs remit is inflation and only inflation. It shouldn't matter what GDP, unemployment and so on is doing - they have one thing to target and that is 2% inflation. i can't see how a cut can be justified when CPI is falling well below their target and deflation is such a serious risk.

However....having said this....before the last meeting Carney not once, but twice felt it necessary to open his mouth and no reason it seems other than to lower the pound. He hasn't done that this time which mean that either they will drops rates or he appreciates that his comments are no longer credible. Has anyone any idea whether Carney has met with Hammond yet, otherwise what has really changed int he two weeks. Wasn't the reason not to drop rates last time all about seeing what the new Government do?

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The BoEs remit is inflation and only inflation. It shouldn't matter what GDP, unemployment and so on is doing - they have one thing to target and that is 2% inflation. i can't see how a cut can be justified when CPI is falling well below their target and deflation is such a serious risk.

However....having said this....before the last meeting Carney not once, but twice felt it necessary to open his mouth and no reason it seems other than to lower the pound. He hasn't done that this time which mean that either they will drops rates or he appreciates that his comments are no longer credible. Has anyone any idea whether Carney has met with Hammond yet, otherwise what has really changed int he two weeks. Wasn't the reason not to drop rates last time all about seeing what the new Government do?

It could be that Hammond and May have a different view of Carney to that of George.

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Carney has the brake and accelerator, Teresa May has the steering wheel and ignition key, and Hammond has the clutch and gearbox.

Carney's done about as much as he can with his controls, it's time that May and Hammond did something with theirs to get this car moving in the right direction.

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Real-term wages is the only indicator that actually matters to the Bank and the Treasury. An admission that interest rates will not rise until the country has seen a sustained improvement in real wages is the only direction Carney should have given from the start. This would have had the dual benefit of being truthful and easily defended in public. Unlike the present situation which seems utterly ad hoc to the point of becoming self-parody.

Expectations have been allowed to run too far up the slope for them not to cut on Thursday. The stock market will not take kindly to another hold.

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Expectations have been allowed to run too far up the slope for them not to cut on Thursday. The stock market will not take kindly to another hold.

"The markets go up. The markets go down"

Same as it ever was - we saw that immediately post brexit and now the FTSE is back to where it was.

Carnage will keep his powder dry until there's a wobble i.e. article 50 invoked or something similarly monumental.

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My bet is no change.

The £ rose strongly today suggesting a rate increase less likely.

But also, intuitively, it is a weapon they can only fire so many times. Mark Carney can reduce it, but he seems to have a complete inability to get it up. How many times since 2009 has the economy shown at least some life? Quite a few months, yet - despite talk - no increase.

Things in the UK economy are not going to look pretty in the next few months. If there are pressures now to cut the interest rate, they are as nothing compared to what we will see in September / October coming through.

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I'll be surprised if they cut, a few soundbites saying they will is usually enough, come Thursday they will stay on hold, job done for another month.

The ECB and Fed indulge in the same shenanigans to the same effect.

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Carney has the brake and accelerator, Teresa May has the steering wheel and ignition key, and Hammond has the clutch and gearbox.

Carney's done about as much as he can with his controls, it's time that May and Hammond did something with theirs to get this car moving in the right direction.

Just occurs to me what would happen to a car on Top Gear if Clarkson had the brake and accelerator, May has the steering wheel and ignition key, and Hammond has the clutch and gearbox. I don't think the car would be in one piece for long!

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Dropping the rate 0.25% will save me £62-50 per month so I hope they do.

I thought it was unlikely but there has definitely been some softening up in MSM recently, in terms of recently confirmed downturn post Brexit, so I think it is more likely than it was.

Edited by man o' the year

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Dropping the rate 0.25% will save me £62-50 per month so I hope they do.

I thought it was unlikely but there has definitley been some softening up in MSM recently, in terms of recently confirmed downturn post Brexit, so I think it is more liekly than it was.

Good to know who i am sponsoring.

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