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Interest Rates Likely To Increase Soon

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UK consumer spending suggests rate increase

Strap yourselves in for a bumpy ride this winter. It seems that the surprise rate increase by the Bank of England earlier this month hasn’t been enough to hold consumer spending or an increase in house prices in the UK. What’s the Bank of England to do?


Edited by m19

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Guest Alright Jack

Interest rates will keep rising by just the required amount to get you to believe that the currency is worth holding - thus preventing it from collapsing. This is what the MPC do, they target 'demand for the currency' and not the 'supply of the currency' (which is inflation) In this way the value of the currency (its exchange rate for goods) can be maintained whilst the printing press continues to blow a fuse.

This makes absolutely no difference to the rise in the rate of inflation which is now stepping up into the next gear. M4 is at 20% YOY on a rolling three month average. This means the supply of money and credit is more than doubling every four years but, incredibly people are still happy with savings rates of about 4.5% less tax.

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Well I've got £10 on +0.25%, £5 on +0.5% and £2 on any other upward change. Stand to make £180, £1000 or £600 respectively. Hike! Hike! Hike! Hike! :P

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I think the BoE are behind the curve.

They can probably wait a month to see what happens to the economy, but right now it looks like rates need to rise another 25bp.

My best guess now is a rate rise in October.

The inflation monster is coming back, any fool can see that, with rising energy prices but also rising wages in China, the days of low rates look to be coming to an end.

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  • 302 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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