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Mpc Decision This Week


teddyboy
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Timing is everything and sentiment, is what its all about

I think they will hold this month as i just voted,

there will be a 25pc rise before the end of the year, they wouldn't do two increases on the trot... as it could create a rush for the doors!

thats just my two pence!

25pc rise by the end of the year. I wish. :)

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Hold this month.

But I don't go along with the "Brown will always oppose interest rate rises" line.

There is a time for everything and now could be a good time for Prudence to tuck a few rate rises in his back pocket, if you don't raise, you can't cut, and cutting is what Brown will want to do before he faces Cameron at the next election.

If house prices fell 10% next month, it would not prevent Brown entering No10 (it's staying there that's the problem) and he knows it.

NuLabour are desperate for him, like the proverbial turkeys looking forward to Christmas!

We've had the mini-boom, so why not the mini-slide, with Gordon and Merv riding to the rescue of the beleaguered home owners in a couple of years time. Perficked!

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Hold this month.

But I don't go along with the "Brown will always oppose interest rate rises" line.

There is a time for everything and now could be a good time for Prudence to tuck a few rate rises in his back pocket, if you don't raise, you can't cut, and cutting is what Brown will want to do before he faces Cameron at the next election.

If house prices fell 10% next month, it would not prevent Brown entering No10 (it's staying there that's the problem) and he knows it.

NuLabour are desperate for him, like the proverbial turkeys looking forward to Christmas!

We've had the mini-boom, so why not the mini-slide, with Gordon and Merv riding to the rescue of the beleaguered home owners in a couple of years time. Perficked!

I reckon Nu Labour will push Blair out around/before Xmas - dont forget he still has to be arrested/interview by Scotland yard over cash for peerages.

Brown wont want Blair around for May elections in Scotland, Wales and local English elections. IMO if Brown gets in - he probably will, though by then Labour will be in meltdown, Brown will quickly want to leverage the honeymoon lift with a post Scotish/Welsh mandate from The English, and call a June 2007 General Election.

He faces a very tough struggle to beat Cameron, and wont be prepared to have anything risk his chances of re-election

In view of that I expect MPC to come under extreeme pressure to cut/hold rates till after next summer. Real inflation can be squirelled away in ONS figures for another 12 months, and the HPI party may continue for another year :angry:

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I want to try and bring this thread from the abstract into the real world.

Do you really understand what you're talking about? (I think NOT in many cases!) Do you practise what you preach?

Complaining about interest rates being too low and yet at the same time holding a large proportion of your wealth in cash / deposit or bonds is plainly living in confusion and denial. You are infact saying to the Bank of England that you are happy with the status-quo. Do you understand the consequences of being the last person to jump ship?

Practise what you preach. Take action. Let's debate from a real world perspective and not just jaw-bone.

I'll begin. I believe that interest rates are FAR lower than the real rate of inflation. I go as far as to say that the CPI and most the government numbers have been spun to total irrelevance. They are outright lies because the underlying economic situation is extremely dire.

For these reasons I vote with my feet by holding only very little currency.

Thank you.

Go on then Jack. You hav'nt said whether you think there will be a change in the base rate or not.

Care to enlighten us.!

Oh come one it's just a bit of fun. 1 in 3 chance of guesing right. (ok, please, some statistician tell me I'm wrong!!)

:D:D

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I think that it could well be a 0.25% rise!!!

Oil has come down to sub $70 a barrel but it does take a while to filter through. The BOE has put things on hold for a while and it jumped from 1.9% to 2.6% in 2 months. I think prudence will take over here and they are starting to take action. I think 5>5.75% by this time next year IF no action is taken soon. But get used to 5%+ base rates (6.25% Mortgage Rate?) for the near future is my call.

TB

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Bloomberg poll says no.

Sept. 4 (Bloomberg) -- The Bank of England will probably leave its benchmark interest rate unchanged this week after a surprise increase last month, a survey of economists shows.

Policy makers led by Governor Mervyn King will keep the rate at 4.75 percent following a quarter-point increase on Aug. 3, according to all 49 economists in a Bloomberg News survey. The bank will announce the decision at noon on Sept. 7 in London and publish minutes of the meeting Sept. 20.

Many of those on bloomberg are just professional guessers , i was watching bloomberg last month the moment they put them up to 4.75% , there were 2 suited pundit ponces in the studio they both said no rise this month { meaning August } and gave the reasons why they thought there would be no rise , when the news came through those 2 were speechless and somewhat embarassed , you could barely see there faces for the amount of egg on them :lol:

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The recent news has pointed to much higher levels of inflation and today's Halifax report (?) apparently says houses are up 1%. Motoring expenses up 7.2%. RPI report points to unexpected rises in retail inflation. Its all bad news on the inflation front and precisely why Merv should be not only vigilant but in an inflation fighting mode. If he lets it go his "vigilance" will no longer carry credibility.

I didn't do it but, a tenner with bet fair last week would have outperformed returns on BTLs by an enormous margin. I think there is a slim chance we will get the unexpected. BBC farticle is telling:

http://news.bbc.co.uk/1/hi/business/5320664.stm

Last Updated: Thursday, 7 September 2006, 06:35 GMT 07:35 UK
The Bank of England
is expected to hold
interest rates at 4.75% after its latest meeting, but many analysts are predicting a rise later this year.

Last time they were calling the hold. This time they shift it over to an expectation that they will hold--not the BBC's expectation.

60:40 for a hike. :)

http://business.timesonline.co.uk/article/...2340136,00.html

The Sunday Times September 03, 2006

Bank’s credibility gap over ‘true’ measure of inflation

Now, however, the Bank faces a problem, arguably its most serious yet. There are doubts, not just about its ability to control inflation in future, but if it is under control now. Those doubts stem from scepticism about whether the consumer prices index (CPI), the Bank’s target inflation measure, accurately reflects people’s genuine experiences.
This is a serious matter, as Bank insiders are aware. If people stop believing the inflation numbers, the credibility of monetary policy suffers. That could begin the slippery slope to economic anarchy.
Edited by Realistbear
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FTSE seems to be a bit wary of what the Muppets may do:

FTSE 100 (FSI:^FTSE) Edit

Index Value: 5,868.50

Trade Time: 9:34AM

Change: Down 60.80 (1.03%)

Prev Close: 5,929.30

Open: 5,929.30

Day's Range: 5,868.50 - 5,929.30

52wk Range: 5,130.90 - 6,137.10

A hold may be an indicator of weakness in the economy despite the increasing debt levels? A hike would be bad for the economy and may bring the HPC forward by a few months. Gordon--you are boogered either way.

Everyone, it seems, is concerned about inflation except, that is, the UK:

http://uk.biz.yahoo.com/07092006/94/europe...tion-fears.html

Thursday September 7, 09:04 AM
European bourses lower on inflation fears
European equities fell on Thursday as interest rate concerns resurfaced, with comments due from US Federal Reserve and European Central Bank officials, while the Bank of England is seen keeping UK rates on hold.
In early trade, the FTSE Eurofirst 300 fell 0.5 per cent to 1,357.52, while Frankfurt’s Xetra Dax shed 0.5 per cent to 5,786.86.
In Paris, the CAC 40 (Paris: news) lost 0.7 per cent to 5,082.5 and London’s FTSE 100 (news) slipped .
Edited by Realistbear
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FTSE seems to be a bit wary of what the Muppets may do:

FTSE 100 (FSI:^FTSE) Edit

Index Value: 5,868.50

Trade Time: 9:34AM

Change: Down 60.80 (1.03%)

Prev Close: 5,929.30

Open: 5,929.30

Day's Range: 5,868.50 - 5,929.30

52wk Range: 5,130.90 - 6,137.10

A hold may be an indicator of weakness in the economy despite the increasing debt levels? A hike would be bad for the economy and may bring the HPC forward by a few months. Gordon--you are boogered either way.

Everyone, it seems, is concerned about inflation except, that is, the UK:

http://uk.biz.yahoo.com/07092006/94/europe...tion-fears.html

Thursday September 7, 09:04 AM
European bourses lower on inflation fears
European equities fell on Thursday as interest rate concerns resurfaced, with comments due from US Federal Reserve and European Central Bank officials, while the Bank of England is seen keeping UK rates on hold.
In early trade, the FTSE Eurofirst 300 fell 0.5 per cent to 1,357.52, while Frankfurt’s Xetra Dax shed 0.5 per cent to 5,786.86.
In Paris, the CAC 40 (Paris: news) lost 0.7 per cent to 5,082.5 and London’s FTSE 100 (news) slipped .

Could the markets be falling because someone has heard rates are going up?

The odds for a 0.25% increase in rates are coming down on Betfair.......

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Was just about to post this myself.

If rates are held, expect the FTSE to regain in the afternoon.

FTSE seems to be a bit wary of what the Muppets may do:

FTSE 100 (FSI:^FTSE) Edit

Index Value: 5,868.50

Trade Time: 9:34AM

Change: Down 60.80 (1.03%)

Prev Close: 5,929.30

Open: 5,929.30

Day's Range: 5,868.50 - 5,929.30

52wk Range: 5,130.90 - 6,137.10

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Could the markets be falling because someone has heard rates are going up?

The odds for a 0.25% increase in rates are coming down on Betfair.......

Unfortunately, hold is a certainty! I wouldnt consider betfair any kind of gauge! Hardly the big boys piling in with a tenner available at 16.5/1 and a whopping 15 quid at 16's.

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Could the markets be falling because someone has heard rates are going up?

Maybe they are worried that Brown may be PM soon? :lol::lol:

Has somone had a tip-off?

FTSE falls on rate fears

LONDON (Reuters) - The FTSE 100 (.FTSE: Quote, Profile, Research) fell on Thursday, led by a sharp decline in the construction sector and amid lingering fears that the Bank of England may put up interest rates at noon.

Shares in Hanson (HNS.L: Quote, Profile, Research) fell 1.9 percent and Wolseley (WOS.L: Quote, Profile, Research) dropped 2.1 percent after Tomkins (TOMK.L: Quote, Profile, Research) plunged 12.8 percent following a warning on Q3 profit amid a slowdown in its North American markets.

Yell (YELL.L: Quote, Profile, Research) led the gainers, up 7.6 percent, after the Competition Commission proposed to ease price controls on the UK-directories firm, saying it faced increased competition from a new rival and the Internet.

Overall, sentiment was depressed by concern over whether the Bank of England will announce at 12 p.m. that it is to keep interest rates on hold, as expected, or to raise them.

"There are strong reasons for raising rates such as inflation being above the 2 percent target," a trader said. If the BoE's Monetary Policy Committee holds rates at 4.75 percent, cash will flow back into the equity market, he said.

Edited by jp1
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