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Realistbear

Why The M P C Will Do Nothing This Month- T B H S

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http://uk.biz.yahoo.com//03092006/140/inte...ected-stay.html

Sunday September 3, 12:23 PM
Interest Rates Expected To Stay Put
The Bank (
TBHS - news
) of England is expected to leave interest on hold this week after it raised the cost of borrowing last month for the first time in two years. Economists predicted that the Bank's Monetary Policy Committee (MPC) would peg rates at 4.75% at the end of its monthly two-day meeting on Thursday. It followed the surprise hike in August as the MPC tried to curb rising inflation on the back of higher gas and electricity bills.
An increase in interest rates is good news for people with savings but hits those with mortgages, loans and credit card bills, as it makes repayments more expensive.
Even so, economist David Page, of Investec Securities, said: "We expect rates to be left on hold at 4.75% this week and to rise to 5% in November."
John Butler, of HSBC, also predicted rates to increase in November as the MPC looked to bring inflation under control.
The Consumer Prices Index (CPI (NYSE: CPY - news) )
rate of inflation was 2.4% in July - the third month in a row above the Bank's 2% target.
Bank of England governor
Mervyn King said last month that there was a 50-50 chance that inflation would rise above 3% over the next six months.

2 good reasons for the MPC not to act: 1. inflation well above target for 3 month s in a row and 2. Merv sees a high risk it will go to 3% within 6 months. Sounds like some good reasons to do nothing then. :blink:

On the other hand, a GOOD reason not to raise rates is sterling and the threat its meteoric rise against the $ is posing to exports. If that is, we have much left to export now that NS oil is dwindling and our car industry is being shipped out East .

Edited by Realistbear

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That last IR 'bluff' hasn't worked obviously

They need to surpress borrowing/spending without crashing the housing market

Only option left - if no more IR rises - is to increase immigration even more and force people wages down even further...

Edited by dnd

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Only option left - if no more IR rises - is to increase immigration even more and force people wages down even further...

Thanks for completing the circle for me DND. For some stupid reason, I hadn't quite made the connection that clearly in my own mind.

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Thanks for completing the circle for me DND. For some stupid reason, I hadn't quite made the connection that clearly in my own mind.

Yep, it's a 2 pronged attack to squeezing borrowing and spending in order to take control of REAL inflation (3 pronged attack if you include botched CPI figures to hide real inflation)

IR rises reducing borrowing --->> borrowing/spending <<--- increasing immigration reducing wages

They've slowly been increasing immigration - but it hasn't worked (people are unconsiously borrowing to make up the difference in their wages and rising prices to maintain their standard of living) hence they recently tried to nudge up IR to scare us - but that little rise hasn't worked either

Obviously, they only have so much room to raising IR - it might crash the housing market - so if it still doesn't work after a couple more IR rises then they'll attack from the other angle ie immigration (and possibly even more butchered CPI figures)

Regardless, our standard of living is being driven downwards - by ourselves, now, by choice - or in the future through debt repayment...

Edited by dnd

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BoE will NOT raise the rates again.

The next move will be downwards.

BoE will rather eat their own testicles than see the housing market cool off.

It is all fixed. Just like horse racing.

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Flambaed or roasted?

Persoanally I prefer mine on a keebab

fatso

BoE would rather have them tartare with a wilted wild rocket and truffle salad but if it means avoiding a slip in the property market they will even have them goddam raw with some fungus and weeds!

LOL. That would really make them appear a laughing stock.

And they arent already?

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The next move will be downwards.

Unlikely - IR are still needed to subdue people borrowing/spenfding and real inflation - they'll remain static if anything

Lowering IR will increase inflation - they'll be unable to hide it in the CPI (without making it lose all credibility) or import enough immigrants to control the situation - it's difficult enough balancing act as it is...

Controlling real inflation is key here - if the public are more aware of inflation then they'll be pressure on wages to rise - leading to strikes etc

IIRC BOE Merv said that the perception of inflation is more dangerous than inflation itself - he's right - inflation is too subtle to perceive - hence why they've let it rise unoticed at the expense of PR damaging IR rises

Edited by dnd

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Yep, it's a 2 pronged attack to squeezing borrowing and spending in order to take control of REAL inflation (3 pronged attack if you include botched CPI figures to hide real inflation)

IR rises reducing borrowing --->> borrowing/spending <<--- increasing immigration reducing wages

4 pronged including Gordo's mooted public sector pay cuts (2% increase when even dodgy CPI is 2.4%).

5 pronged if the reason NuLab have been promoting globalisation is to further deflate wages (they can't be that insane? :unsure:)

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BoE will NOT raise the rates again.

The next move will be downwards.

BoE will rather eat their own testicles than see the housing market cool off.

It is all fixed. Just like horse racing.

Please give us your reasoning for these statements. Quoting evidence would help. The rest of us obviously don't have your economic aptitude and would welcome enlightenment.

p

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Please give us your reasoning for these statements. Quoting evidence would help. The rest of us obviously don't have your economic aptitude and would welcome enlightenment.

p

Compare the graph on the front page to the graph interest rates.

One may be tempted to speculate that the BoE reduces rates to generate HPI.

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Please give us your reasoning for these statements. Quoting evidence would help. The rest of us obviously don't have your economic aptitude and would welcome enlightenment.

p

He's just spouting. He's entitled to his opinion. No matter how stupid.

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I don't think they have any reason to raise them for a short while yet. Any data we've had has been too early to account for the IR rise in August as most has been from July and August itself. Is oil below $70? Could mean inflation may start to drop a bit this month.

November/December could be a month for the bears to get excited.

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I think the BoE are petrified of a housing crash like the US is experiencing. Even Ben is scared out of his wits and is on record for saying he didn't think it was going to be as bad as it has turned out to be--the "soft landing" language is all but gone in the US now.

Its a case of an IR hike too far. I doubt Merv will risk it as another hike will bring forward the US led crash by several months and the bankers might think they can come up with a cunning plan to avoid following the US down as has always been the case.

How can recession and a HPC be avoided? Massive levels of immigration and more fiscal stimulus which means more CPI fiddling and perhaps moving the goal posts to the new global "norms."

In the end, the BoE and Gordon can run but they can't hide. Its gotta crash so they might as well let it go from the current height rather than try to raise HPI up another notch or two.

Edited by Realistbear

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The MPC will move gradually for good reason, panic measures would risk unnecessarily destabilising the economy.

The MPC is not part of a conspiracy to stop you owning a house, it's a damn sight more neutral than most of the posters on this forum, who want interest rates as high as possible no matter what, because they believe it will personally benefit them.

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The MPC will move gradually for good reason, panic measures would risk unnecessarily destabilising the economy.

The MPC is not part of a conspiracy to stop you owning a house, it's a damn sight more neutral than most of the posters on this forum, who want interest rates as high as possible no matter what, because they believe it will personally benefit them.

We've been rumbled :unsure:

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The MPC will move gradually for good reason, panic measures would risk unnecessarily destabilising the economy.

The MPC is not part of a conspiracy to stop you owning a house, it's a damn sight more neutral than most of the posters on this forum, who want interest rates as high as possible no matter what, because they believe it will personally benefit them.

The MPC is well aware that a slump in the property market spells the end of the economic bubble that we are currently living in. They are therefore doing everything they can to continue to inflate the bubble.

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The MPC is well aware that a slump in the property market spells the end of the economic bubble that we are currently living in. They are therefore doing everything they can to continue to inflate the bubble.

This bubbles got bigger than my belly. Like all bubbles it will pop sooner or later - this ones been going longer than any other - It'll end soon.

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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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