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Looks Like No Chance Of A Rate Hike By Boe In The Near Future

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http://today.reuters.co.uk/investing/finan...OE-UPDATE-1.XML

LONDON, May 31 (Reuters) - Rising energy prices have yet to fuel inflationary pressure in the labour market through higher wage demands, Bank of England Monetary Policy Committee member Kate Barker said.

"We have seen these big rises in energy prices and that has put a squeeze on what people have to spend. But we haven't seen that translate into inflationary pressure in the labour market," Barker was quoted as saying in Tuesday's edition of the Nottingham Evening Post.

The BoE said the interview was conducted last week.

"What has not been so reassuring is that rising energy prices have proved to be more persistent -- they have risen for longer than we anticipated. So we are not out of the woods yet and I don't think that it would be right to stop being concerned," Barker said.

Barker said monetary policymakers needed to be forward looking to act in a timely manner if pressures emerge.

"We have to look forward with our policy because if we see pressures then we want to act early," she said.

Falling stock prices could become a worry for policymakers as that may dent business investment, Barker said.

"In percentage terms, I don't feel that the decline is a problem, but if we were to see the markets continue to decline then we might become more concerned because falling markets make it more difficult for firms to invest. We want investment to improve."

The FTSE-100 index of leading shares has fallen 8 percent from a five-year high hit in April at 6,137.

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http://today.reuters.co.uk/investing/finan...OE-UPDATE-1.XML

LONDON, May 31 (Reuters) - Rising energy prices have yet to fuel inflationary pressure in the labour market through higher wage demands, Bank of England Monetary Policy Committee member Kate Barker said.

"We have seen these big rises in energy prices and that has put a squeeze on what people have to spend. But we haven't seen that translate into inflationary pressure in the labour market," Barker was quoted as saying in Tuesday's edition of the Nottingham Evening Post.

The BoE said the interview was conducted last week.

"What has not been so reassuring is that rising energy prices have proved to be more persistent -- they have risen for longer than we anticipated. So we are not out of the woods yet and I don't think that it would be right to stop being concerned," Barker said.

Barker said monetary policymakers needed to be forward looking to act in a timely manner if pressures emerge.

"We have to look forward with our policy because if we see pressures then we want to act early," she said.

Falling stock prices could become a worry for policymakers as that may dent business investment, Barker said.

"In percentage terms, I don't feel that the decline is a problem, but if we were to see the markets continue to decline then we might become more concerned because falling markets make it more difficult for firms to invest. We want investment to improve."

The FTSE-100 index of leading shares has fallen 8 percent from a five-year high hit in April at 6,137.

I'm sorry, I missed the bit where it says we have no chance of IR hikes.

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How can companies with higher operating costs possibly pass on higher wages to their employees? I'm not talking about the greedy gas, oil and utility companies that pay their CEO's fatcat salary's, I'm talking about manufacturing and services where the price of raw goods has gone up.

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How can companies with higher operating costs possibly pass on higher wages to their employees? I'm not talking about the greedy gas, oil and utility companies that pay their CEO's fatcat salary's, I'm talking about manufacturing and services where the price of raw goods has gone up.

Pass on the cost to their customers.

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Pass on the cost to their customers.

They can try, but at the moment they can't seem to get away with it. Therefore, they ditch their UK operations and go overseas in a hurry in order to preserve margins.

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They can try, but at the moment they can't seem to get away with it. Therefore, they ditch their UK operations and go overseas in a hurry in order to preserve margins.

yes but thats OK, because then Gordon employs the workforce. Silly!

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Where does is say rates will not rise in the near future.

Must be a different Bank from the one I read about.

Rates are heading up, BofE know it, shame they are not letting anyone other than their pals know, who are furiously offshoring their operations know what the future holds.

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I think that what may happen is that the weaker companies will go to the wall or close operations in a certain area. This leads to less competition and rising prices. Which leads to more inflation and higher interest rates.

One thing I am a bit worried about though is that if the ONS publishes the basket of goods that it uses for inflation does that mean that bigger companies deliberately not put prices up on these or even reduce prices and leave them as loss leaders - from their POV it would make sense otherwise they risk interest rate rises which would them no good.

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I think that what may happen is that the weaker companies will go to the wall or close operations in a certain area. This leads to less competition and rising prices. Which leads to more inflation and higher interest rates.

One thing I am a bit worried about though is that if the ONS publishes the basket of goods that it uses for inflation does that mean that bigger companies deliberately not put prices up on these or even reduce prices and leave them as loss leaders - from their POV it would make sense otherwise they risk interest rate rises which would them no good.

Actually rereading the article I may have misinterpreted, she's saying infaltion is still a danger.

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Depends what you mean by "near future".

If you mean within the next few hours, I'm with you. There will not be a rate increase.

If you mean within the next three months, I have to disagree. The MPC will raise rates in July or August IMO.

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http://today.reuters.co.uk/investing/finan...OE-UPDATE-1.XML

LONDON, May 31 (Reuters) - Rising energy prices have yet to fuel inflationary pressure in the labour market through higher wage demands, Bank of England Monetary Policy Committee member Kate Barker said.

"We have seen these big rises in energy prices and that has put a squeeze on what people have to spend. But we haven't seen that translate into inflationary pressure in the labour market," Barker was quoted as saying in Tuesday's edition of the Nottingham Evening Post.

The BoE said the interview was conducted last week.

"What has not been so reassuring is that rising energy prices have proved to be more persistent -- they have risen for longer than we anticipated. So we are not out of the woods yet and I don't think that it would be right to stop being concerned," Barker said.

Barker said monetary policymakers needed to be forward looking to act in a timely manner if pressures emerge.

"We have to look forward with our policy because if we see pressures then we want to act early," she said.

Falling stock prices could become a worry for policymakers as that may dent business investment, Barker said.

"In percentage terms, I don't feel that the decline is a problem, but if we were to see the markets continue to decline then we might become more concerned because falling markets make it more difficult for firms to invest. We want investment to improve."

The FTSE-100 index of leading shares has fallen 8 percent from a five-year high hit in April at 6,137.

speaking with people from the City.. most of the big banks are calculating for a rate hike..

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speaking with people from the City.. most of the big banks are calculating for a rate hike..

Correct. That is the information I have too.

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speaking with people from the City.. most of the big banks are calculating for a rate hike..

You use the word "hike". Do your people quantify the rate rises?

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Does anybody remember 1997? We didn't use to talk about interest rate rises. I wonder why.

Since the talk of rate rises are met with such swift rebuttal from the bulls, I conclude that the potential impact must be big, even if the back-of-fag-packet-affordability-spin say otherwise?

:unsure:

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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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