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......RPI index linked pensions up.....any pay rises? are the self employed able to pay themselves inflation linked pay rises? Do the zero hour contractors get more hours?;)

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10 hours ago, mrtickle said:

I thought the MPC had a STATUTORY duty to use Interest rates to control inflation...

They should have raised rates last year.

They are, by 'looking through' any figures that might demand raising rates. Remember we had a recent period when inflation soared and Mervin King, the then governor of the BOE, kept rates at half a percent just by 'looking through'.

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13 hours ago, mrtickle said:

Inflation-since-2012.PNG

I thought the MPC had a STATUTORY duty to use Interest rates to control inflation...

They should have raised rates last year.

 

 

It's all well out of control.

Before long they'll be back to the 80s and going on about how to get rampant inflation under control because it's bad for the economy.

Edited by billybong

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10 hours ago, Blod said:

They are, by 'looking through' any figures that might demand raising rates. Remember we had a recent period when inflation soared and Mervin King, the then governor of the BOE, kept rates at half a percent just by 'looking through'.

Indeed. Next time I get called up on something at work I'm going to tell my boss to "look through" the problem to the brighter future when I do better. I'm sure it'll work fine :)
 

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I thought the low interest rates were put in place for emergency measures after the bailouts, losses, write-downs and when nobody would lend to each other....the economy surely must still be in a bad place if they have dropped them from 0.5% to 0.25% since, at the same time as saying everything is getting better, nothing to see, all is good.....:huh:

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12 hours ago, mrtickle said:

Indeed. Next time I get called up on something at work I'm going to tell my boss to "look through" the problem to the brighter future when I do better. I'm sure it'll work fine :)

They chose to 'look through' anything that might lead to rate raises whiilst concentrating on using their own acceptedly flawed predictions to justify a drop and then compounding the issue by failing to reverse their obvious error. History will judge them for what they are, fools.

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14 hours ago, winkie said:

I thought the low interest rates were put in place for emergency measures after the bailouts, losses, write-downs and when nobody would lend to each other....the economy surely must still be in a bad place if they have dropped them from 0.5% to 0.25% since, at the same time as saying everything is getting better, nothing to see, all is good.....:huh:

It's gone way beyond the need for emergency measures, nine years since the last recession. Imo it is all about maximising growth and the only way they are doing it is borrowing future growth via debt. It has resulted in pumping up the housing bubble in the south of England, not because people were borrowing, private sector debt has been stubbornly stuck for a decade, but because people didn't have to sell and sat on escalating Equity. Meanwhile the Government did take up the debt mantle, doubling debt in a decade and putting that towards phoney GDP.

As the main debtor now, having gone on the Mother of all spending sprees in the guise of Austerity,  the Government is bound to load the dice re. interest rates from hereonin.

Edited by crashmonitor

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1 hour ago, crashmonitor said:

It's gone way beyond the need for emergency measures, nine years since the last recession. Imo it is all about maximising growth and the only way they are doing it is borrowing future growth via debt. It has resulted in pumping up the housing bubble in the south of England, not because people were borrowing, private sector debt has been stubbornly stuck for a decade, but because people didn't have to sell and sat on escalating Equity. Meanwhile the Government did take up the debt mantle, doubling debt in a decade and putting that towards phoney GDP.

As the main debtor now, having gone on the Mother of all spending sprees in the guise of Austerity,  the Government is bound to load the dice re. interest rates from hereonin.

They've been expecting a robust recovery for the past seven years, as evidenced by Chote's forest of hockey-sticks below.

The partial re-normalisation of interest rates would then have kept BTL in check and allowed a resumption of lending to OO's at the lower end.

But the greatest failure was ideological. The failure to come up with a program of 'general needs' social housing rather than a succession of handouts to private developers and banks.

OBR+hockey+sticks+2.jpg

Edited by zugzwang

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On 14/02/2017 at 10:06 AM, winkie said:

......RPI index linked pensions up.....any pay rises? are the self employed able to pay themselves inflation linked pay rises? Do the zero hour contractors get more hours?;)

 

Aren't pensions now linked to CPI rather than RPI ?

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18 hours ago, winkie said:

I thought the low interest rates were put in place for emergency measures after the bailouts, losses, write-downs and when nobody would lend to each other....the economy surely must still be in a bad place if they have dropped them from 0.5% to 0.25% since, at the same time as saying everything is getting better, nothing to see, all is good.....:huh:

That's because they were constrained by the ZLB. Else they would have cut rates to say -3% and has less need to expand their b/sheet.

Imagine the Taylor Rule resulted in deeply negative rates, thus the cessation of QE (pre-brexit) effectively resulted in a less negative notional rate. That's basically what has happened in the US where rates are now rising again. In the UK the central bank offset the temporary Brexit shock with a cut/more QE. If growth continues they'll reverse it (no, really, they will)

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59 minutes ago, Little Frank said:

That's because they were constrained by the ZLB. Else they would have cut rates to say -3% and has less need to expand their b/sheet.

Imagine the Taylor Rule resulted in deeply negative rates, thus the cessation of QE (pre-brexit) effectively resulted in a less negative notional rate. That's basically what has happened in the US where rates are now rising again. In the UK the central bank offset the temporary Brexit shock with a cut/more QE. If growth continues they'll reverse it (no, really, they will)

In that case how may I ask, are they are expecting to find this growth that is really really needed?;)

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On 2/16/2017 at 7:02 PM, mrtickle said:

Indeed. Next time I get called up on something at work I'm going to tell my boss to "look through" the problem to the brighter future when I do better. I'm sure it'll work fine :)
 

As an aside many of the BoE committee hearings with MP's were a brilliant way to spruce up your ******** vocab; Genuinely very useful for work meetings.

Also: "I don't recall." and "I understood." is brilliant phrasing.

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On 2/17/2017 at 11:16 AM, zugzwang said:

They've been expecting a robust recovery for the past seven years, as evidenced by Chote's forest of hockey-sticks below.

The partial re-normalisation of interest rates would then have kept BTL in check and allowed a resumption of lending to OO's at the lower end.

But the greatest failure was ideological. The failure to come up with a program of 'general needs' social housing rather than a succession of handouts to private developers and banks.

OBR+hockey+sticks+2.jpg

 

The recent chart of the bank rate is particularly noteworthy as well as apt for demonstrating their incompetence and self servery as in 2016 it actually went downwards instead of the upwards they've been claiming to be expecting.

It's clear they really haven't had a clue what to do  - except at being experts in lining their own pockets.

Edited by billybong

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On 2/19/2017 at 5:19 AM, Tapori said:

As an aside many of the BoE committee hearings with MP's were a brilliant way to spruce up your ******** vocab; Genuinely very useful for work meetings.

Also: "I don't recall." and "I understood." is brilliant phrasing.

Outright denial of well established facts seems to be pretty effective as well - at least it seems to convince the MPs.

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On 19/02/2017 at 5:19 AM, Tapori said:

Also: "I don't recall." and "I understood." is brilliant phrasing.

'It was my understanding'

'To the best of my recollection' 

etc etc

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On 2/17/2017 at 11:29 AM, LiveinHope said:

 

Aren't pensions now linked to CPI rather than RPI ?

http://www.bbc.co.uk/news/business-39026975

"Instead of using the Retail Prices Index (RPI), it could be that some companies would be allowed to use the Consumer Prices Index (CPI) instead, the government said.

Since CPI is usually lower than RPI, it would save firms money.

However, such a change could cost the average pensioner up to £20,000 over the course of their retirement, according to the discussion document.

Most public-sector Defined Benefit pensions schemes moved to the CPI measure in 2011."

 

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5 minutes ago, aberyork said:

http://www.bbc.co.uk/news/business-39026975

"Instead of using the Retail Prices Index (RPI), it could be that some companies would be allowed to use the Consumer Prices Index (CPI) instead, the government said.

Since CPI is usually lower than RPI, it would save firms money.

However, such a change could cost the average pensioner up to £20,000 over the course of their retirement, according to the discussion document.

Most public-sector Defined Benefit pensions schemes moved to the CPI measure in 2011."

 

Yes, many Public Sector workers got a shock in 2016 because the CPI was -ve in September 2015 when pension increases are calculated - so they got no increase. Nobody will be as well off as the boomers.

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