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Is The 1/4% Rise Too Little Too Late?

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Interest rates can be controlled by people or events. At the moment the MPC are in control (or seemingly so). However, consumer spending and housing prices have gone into orbit. The MPC have indulging people with low interest rates (and if they didn't like Gordon's formula for calculating inflation, they could have protested). The debt bubble is now so precarious that the MPC would trigger an insolvency fest if they applied a sharp tap on the brakes.

Perhaps the 1/4% interest rise we have seen today too little too late. Are we about to see history repeat itself? Will interest rates be forced up by the markets and will we see nine limos rushing from the airport instead of one?

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Interest rates can be controlled by people or events. At the moment the MPC are in control (or seemingly so). However, consumer spending and housing prices have gone into orbit. The MPC have indulging people with low interest rates (and if they didn't like Gordon's formula for calculating inflation, they could have protested). The debt bubble is now so precarious that the MPC would trigger an insolvency fest if they applied a sharp tap on the brakes.

Perhaps the 1/4% interest rise we have seen today too little too late. Are we about to see history repeat itself? Will interest rates be forced up by the markets and will we see nine limos rushing from the airport instead of one?

I do think its too little to late so far ive been right about copper gold at the start of this year and now was right about the 1/4 rise in ir. I really think the economy is in a mess, a mess too far, the only hope is rates at 6-7% but that would kill people.

This rate rise was a shock to all economic professionals ( when have they ever been right), this shock will lead to more inflation thus higher ir, so yes this is a start to a global slowdown, what i say is start to pay off your debts tha thave teh highest ir asap,

i just didnt expect to see a reaction like this over 1/4 % rise.

Edited by crash2006

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this shock will lead to more inflation

Errrr... how? People will have to spend more money servicing their debts, leaving less discretionary income for them to spend. This dampens demand in the economy which keeps prices down. Obviously the BoE don't want to over do that dampening and put us in a recession, hence the earlier than expected rise to send a warning signal to consumers and the markets. More like 'a little now instead of lots later' than 'too little too late'.

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Errrr... how? People will have to spend more money servicing their debts, leaving less discretionary income for them to spend. This dampens demand in the economy which keeps prices down. Obviously the BoE don't want to over do that dampening and put us in a recession, hence the earlier than expected rise to send a warning signal to consumers and the markets. More like 'a little now instead of lots later' than 'too little too late'.

They do seem to be trying to tackle real inflation - but it's going to be a difficult balancing act - dampening demand without crashing everthing....

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Errrr... how? People will have to spend more money servicing their debts, leaving less discretionary income for them to spend. This dampens demand in the economy which keeps prices down. Obviously the BoE don't want to over do that dampening and put us in a recession, hence the earlier than expected rise to send a warning signal to consumers and the markets. More like 'a little now instead of lots later' than 'too little too late'.

You are a clueless t*ss*r! :rolleyes::rolleyes::lol:

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I think the Bank rather than controlling inflation is trying to close the door after the horse has bolted.I made the point after the July meeting,on this website that inflation and GDP were spiralling out of control.I also said,referring to the Committe,'sack the f***ing lot of them';arguing that chimps drawing straws to determine policy could do a better job.These ignorant clowns had all the evidence in july to raise rates but chose not to do so.So **** sure that rates didn't need to rise,at the july meeting,they didn't even hint of an august rise.

It's about time the government stopped appointing its thick cronies onto important committees,Jenny Page (millenium dome) comes to mind,and the Committee was independently chosen.Therefore avoiding the Monetary Policy being run by clowns and imbeciles(have they apologised yet for the August 2005 **** up,reducing rates then has caused a 25% overshoot in CPI)

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If the rate of inflation remains the same do they continue to rise the ir to bring it down - or do they only raise the ir if the rate of inflation continues to rise?

I get so confused with absolutes and rates, can anybody help?

Edited by bandylegs

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crashmonitor

Nooo, you have it all wrong - they are supporting the economy - by encouraging ever larger parts of it to flee to other countries where they don't have to pay over-inflated wages to cover over-inflated living costs.

They are supporting consumption - by tempting people into levels of debt NEVER historically seen.

Mind you the banks have made a packet, maybe now that the debts are being thrown back at them it is the banks that want rates to rise so that their earnings can be propped up by charging more to those who are not about to be made bankrupt.

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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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