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Realistbear

Ecb I R Set To Rise Due To Recent Data

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http://uk.biz.yahoo.com/060203/94/g2wah.html

Europe’s investment upswing and surge in mergers and acquisitions has led to a “remarkable” jump in eurozone bank lending to businesses, according to the European Central Bank.
The latest evidence that the economic recovery in the 12-country group is broadening is likely to convince the central bank that it was right to have signalled another rise in interest rates next month.
The surge in lending to businesses came as eurozone inflation picked up as expected, largely because of higher oil prices.

With the US expected to tighten beyond 4.50% and the EU moving upward Brown may have to follow or suffer a sudden and sustained fall in sterling. Will he raise rates and allow his darling HPI to suffer or will he lower rates and risk fuelling inflation?

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With the US expected to tighten beyond 4.50% and the EU moving upward Brown may have to follow or suffer a sudden and sustained fall in sterling. Will he raise rates and allow his darling HPI to suffer or will he lower rates and risk fuelling inflation?

Anyone got any ideas where the best place to put money is?

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My bet is he will lower them & let sterling 'Tank' :blink:

...Thus ramping up inflation and allowing this inflation to eat the nations debts.

Exports will likely rise too, giving more succour to the CBI.

This does seem the best course of action.

Even though the most prudent in society (the savers) would be punished most severly.

Will Gordon go for Economic expediency (rates down) or Political expediency (rates up)?

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UK: Inflation 2%, IR 4.5%

EU: Inflation 2.4% IR 2.25%

Is there really an argument that the UK has no room to cut, or is this thread just more bear fodder?

The ECB are proactive, they look at money supply and anticipate oil prices feeding through. They will raise rates in a pre-emptive strike. The MPC are reactive and place too much stock in CPI but I don't believe they are brave enough to cut while Europe and US raise theirs.

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Thus ramping up inflation and allowing this inflation to eat the nations debts.

Lowering the pound won't 'eat the nation's debts'. It will reduce the real value of our wages and thereby make the debts worse.

Only a fool would even be thinking of trashing the pound right now: unfortunately there's one living in Number 11.

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...Thus ramping up inflation and allowing this inflation to eat the nations debts.

Exports will likely rise too, giving more succour to the CBI.

This does seem the best course of action.

Even though the most prudent in society (the savers) would be punished most severly.

Will Gordon go for Economic expediency (rates down) or Political expediency (rates up)?

Suits me. I don't see those holding piles of sterling as 'prudent'. Hold foreign equities and yawn precious metals.

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Brown can't win. If US and Euro rates go up much further Sterling will fall increasing imported inflation; if rates are cut this will exacerbate that problem and fuel money supply further; if rates are raised I think that will be the final nail in HPI's coffin.

I think we will the MPC sit on its hands for another 6 months and see where things get to. But every month there is no change increases the liklihood of the next rise being up IMO (given other world factors).

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Re-inflation

whether or not the Chinese effect on inflation (falling prices of manufactured things offsetting the rise in the cost of services) is a one off shift or a continuous thing is very important re-future inflation.......

Financial markets seem to think it's the latter if you look at long term bond yields......

It's difficult to compare the Victorian era with now but from 1875- 1900 prices fell about 2% a year in the UK and against a backdrop of level incomes as increased productivity mainfested itself in the form of price cuts rather than wage increases........This has happened recently of course with manufactured goods but surely the time will come when the £1 tshirt and 69p dustpan and brush i saw at ASDA the other day will inflate in price through general inflation in China itself........and only high tech good s like computers come down in price....

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UK: Inflation 2%, IR 4.5%

EU: Inflation 2.4% IR 2.25%

Is there really an argument that the UK has no room to cut, or is this thread just more bear fodder?

Well looking at the EU figures and how the UK is actually part of the EU that suggests that UK inflation is probably being massaged down to 2%.

If you meant EuroLand say so, don't say EU, they are NOT the same thing.

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Well looking at the EU figures and how the UK is actually part of the EU that suggests that UK inflation is probably being massaged down to 2%.

If you meant EuroLand say so, don't say EU, they are NOT the same thing.

Fair point.

Sweden: Inflation 0.9% IR 1.75%

The rest I can't be bothered to research.

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UK: Inflation 2%, IR 4.5%

EU: Inflation 2.4% IR 2.25%

Is there really an argument that the UK has no room to cut, or is this thread just more bear fodder?

wow, so easy to anayse. apply for boe chairperson

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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