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Jason

Mpc August Minutes

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Paragraph 16--on housing. They took the RICS report into account. Looks like the EAs shot themselves in the foot. :lol:

Paragraph 16--on housing. They took the RICS report into account. Looks like the EAs shot themselves in the foot. :lol:

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Anybody know Blanchflower's background and is he one of Gordon's recent recruits?

http://www.businessworld.ie/livenews.htm?a...rollingnews.htm

The minutes to the meeting revealed that only the Monetary Policy Committee's most recent member, David Blanchflower, voted to leave rates on hold.

One of Gordon's new boys. With two more proteges to join the next meeting to make the full 9 it could be 6-3 on the next hike. Looks like Merv has declared his independence. Given the latest CPI miracle its possible that the BoE will no longer give the CPI much weight as it reviews actual inflation.

David "Danny Boy" Blanchflower:

http://www.bankofengland.co.uk/about/peopl...lanchflower.htm

David ‘Danny’ Blanchflower was appointed as an
external member
of the Monetary Policy Committee with effect from 1 June 2006. Danny is the Bruce V. Rauner Professor of Economics at Dartmouth College and a Research Associate at the National Bureau of Economic Research. In addition he is also a Research Fellow at the Centre for Economic Studies at the University of Munich and a Research Fellow at The Institute for the Study of Labor at the University of Bonn.
Edited by Realistbear

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And to think we had such high hopes for Mr B!

Forum May 2006

QUOTE(X-QUORK @ May 24 2006, 02:07 PM)

He sounds like a man who won't be afraid to raise those IRs as inflation takes off.

He couldn't be any more dovish than Nickell, could he? So, the replacement of Nickell is a hawkish event.

frugalista

I guess we were wrong on this one!

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Markets are taking a pretty hawkish view on future IRs. I believe short sterling has already priced in another rise this side of Christmas.

LONDON (AFX) - UK interest rates could well rise further if inflationary pressures remain elevated, although the outlook is still far from certain and will be dependent on upcoming economic data.

The minutes to the August meeting of the Monetary Policy Committee, when interest rates were unexpectedly raised by a quarter point, revealed a 6-1 vote, with only the MPC's most recent member David Blanchflower feeling the committee could afford to wait before hiking rates.

The majority on the MPC felt that 'firm growth, limited spare capacity, rapid growth in broad money and credit and inflation likely to remain above target for the some time' justified an early hike, which it said could prevent the need for a sharper rise later.

'That sounds like a Committee that still has a bias towards tightening further,' said John Butler at HSBC.

The decision came in the wake of inflation data for June which showed the key annual CPI rate spiking up to 2.5 pct, well above the BoE's 2.0 pct target.

Although inflation dipped to 2.4 pct in July, this will provide little comfort to the MPC. Speaking after the release of the August Inflation Report last week, BoE governor Mervyn King said higher energy costs and a sharp rise in university tuition fees could push CPI inflation as high as 3 pct in the coming months.

'It would take very benign price data or a negative demand shock to prevent another rate hike,' said David Page, economist at Investec.

If the CPI were to exceed 3 pct, King would have to write a letter to the Chancellor of the Exchequer Gordon Brown explaining why the MPC has not met its remit, something no BoE governor has yet had to do.

Moreover, HSBC's Butler pointed out that the MPC describing the hike to 4.75 pct as 'likely to remove a degree of monetary accommodation' suggests that the rate-setters still believe monetary policy is accommodative.

At the same time, however, there were some dovish hints to the report which suggest the outlook for interest rates is not quite so certain and will be dependent on the outcome of forthcoming data.

'The Bank clearly wanted to leave things open,' Investec's Page said.

'There is plenty that you can read into here that points to another rate hike, but against that there are some more dovish elements too,' he said.

First is Blanchflower's unexpected vote to leave rates unchanged, with the new member particularly worried about slackness in the labour market.

Secondly, the minutes showed that members believed there would be 'time to reverse any increase should that prove necessary once the medium-term paths of demand growth and inflation become clearer'.

Vicky Redwood at Capital Economics believed the minutes were 'pretty dovish' and suggested that August's rate rise 'was a one-off pre-emptive move, rather than the start of a sustained tightening'.

She pointed to uncertainties in the minutes, such as the amount of slack in the economy unlikely to become clear until 2007 or beyond, and said Blanchflower's worries about the labour market were backed up by data this morning showing UK ILO unemployment at a six-year high in June.

Redwood believes interest rates will remain on hold for the rest of this year, but conceded that this 'continues to depend heavily on the activity data softening soon'.

Tomorrow's UK retail sales numbers for July will provide an early indication on whether the MPC's 'robust growth forecast' for the third quarter will be met, she said.

As ever, upcoming economic data will be crucial, especially on the inflation front. The central bank will lose credibility if it does not act to tackle price pressures.

'Overall, the MPC may now wait and see, with further moves dependent on the uncertain outlook for inflation,' Henrik Gullberg at CALYON said.

by Jessica Mortimer - jessica.mortimer@afxnews.com

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David "Danny Boy" Blanchflower:

http://www.bankofengland.co.uk/about/peopl...lanchflower.htm

David ‘Danny’ Blanchflower was appointed as an
external member
of the Monetary Policy Committee with effect from 1 June 2006. Danny is the Bruce V. Rauner Professor of Economics at Dartmouth College and a Research Associate at the National Bureau of Economic Research. In addition he is also a Research Fellow at the Centre for Economic Studies at the University of Munich and a Research Fellow at The Institute for the Study of Labor at the University of Bonn.

Think i'll print out a picture of Danny boy , and stick it on the front of me dartboard ;)

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Ah,but.........

How about this for a scenario:

Merv has got one up on gordon while the comittee is depleted and the new boy hasn't got his feet under the table properly.

What price the comittee REALLY asserting themselves(with another rate rise) just as the two imposters from the treasury are getting their induction.

Would that be a baptism of fire or what!!!!.....the two newbies won't have the balls to vote for a cut and bring themselves into direct conflict with the senior members from day one.

they will do what blanchflower has done and abstain.if it looks like a case of the government versus the bankers,the bankers will always win.

GO ON MERV!!!!!....DO IT NEXT MONTH MATE,STRIKE WHILE THE IRON IS HOT AND SHOW THESE F***ERS WHO'S BOSS!!!!

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http://en.wikipedia.org/wiki/Blanchflower_v._Blanchflower

No wonder he needs a job on the MPC with the alimony he'll be landed with !!

:lol:

christ - i thought you were joking but that really is him! :blink:

how humiliating - his mrs. prefers 'women in comfortable shoes' rather than him. :lol:

more seriously why on earth is this idiot on the MPC - we have to fly him over here at our bloomin' expense and pay for his bloody hotel. no wonder merv chucked his toys out of the pram at the joke that the appointments system has become.

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I think he's been selected because he's carried out in-depth academic research into wages and wage structures, employment and fear of unemployment and the like. Google Blanchflower pay wage and you'll get a list of his publications which give a flavour of his area of expertise. The BOE commissioned a report this year that indicates that one of a number of significant factors affecting house prices and consumer spending is people's expectations of future income. Hardly rocket science I know but the report is linked here.

More importantly, he's a Happiness Guru and this will be a great relief to those members on the MPC who are suffering from the anxieties of knowing that money doesn't buy love.

:rolleyes:

Link to Happiness

It turns out that Blanchflower is interested in sex. Well, who isn't ?

. . . . Mrs Blanchflower ?

:lol:

Edited by get real

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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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