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garybug

B Of E Inflation Report Webcast This Morning

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Here's what you all want to see:

untitledfl2.jpg

So, interest rates are up again soon.

indeed!

Inflation back down to 2% in 24 months? What fantasists... the rates needed to acheive that will be so much higher than they would be comfortable in imposing.

Interesting also to note how even CPI has trended fairly steadily upward since 2003 - in tandem with the new rate "cycle" (notwithstanding the kerazy cut of 2005)

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Having glanced the report, i've noticed how there is "...greater-than-usual uncertainty over the outlook for inflation..." in their predictions.

Doh... we got it wrong again.

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No units for the y-axis on the CPI chart, handy eh?

They remind me of an electron cloud model, just less accurate.

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Guest Charlie The Tramp

Well the music they played at the end of the Webcast was more suited to a funeral. :blink:

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I've just finished reading the inflation report. In general, there seems to be a lot more concern about the upside risks to inflation and also more attention is now being paid to the continued high level of M4 growth.

The MPC also indicates which numbers over the next few months would cause them to conclude upside risks are crystalising.

IMHO we should expect at least one more rate rise in the next three months and if some of the upside risks are borne out in the producer prices and wage settlements numbers then we can expect two or three rises by the end of the year

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I've just finished reading the inflation report. In general, there seems to be a lot more concern about the upside risks to inflation and also more attention is now being paid to the continued high level of M4 growth.

The MPC also indicates which numbers over the next few months would cause them to conclude upside risks are crystalising.

IMHO we should expect at least one more rate rise in the next three months and if some of the upside risks are borne out in the producer prices and wage settlements numbers then we can expect two or three rises by the end of the year

Excellent!

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I've just finished reading the inflation report. In general, there seems to be a lot more concern about the upside risks to inflation and also more attention is now being paid to the continued high level of M4 growth.

The MPC also indicates which numbers over the next few months would cause them to conclude upside risks are crystalising.

IMHO we should expect at least one more rate rise in the next three months and if some of the upside risks are borne out in the producer prices and wage settlements numbers then we can expect two or three rises by the end of the year

Another rate rise seems to be a given now.

http://www.housepricecrash.co.uk/forum/ind...showtopic=47563

http://www.advfn.com/news_BoEs-King-says-c...e_20654176.html

LONDON (Thomson Financial) - The Bank of England's governor Mervyn King

conceded that the quarterly economic projections unveiled today by the central

bank assume another interest rate increase.

"The path of interest rates assumed in this projection anticipates a further

rise in the bank rate," he said in a press conference after the publication of

the quarterly Inflation Report

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Can this go in as tax abuse of the week?

How much did it cost to produce a graph to tell us inflation will be somewhere between one and a million? Zoiks, thanks for your wise words chaps!

And I notice there's absolutely no chance of a recession - ha! Wait until we follow the US down the tubes.

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Another rate rise seems to be a given now.

http://www.housepricecrash.co.uk/forum/ind...showtopic=47563

http://www.advfn.com/news_BoEs-King-says-c...e_20654176.html

LONDON (Thomson Financial) - The Bank of England's governor Mervyn King

conceded that the quarterly economic projections unveiled today by the central

bank assume another interest rate increase.

"The path of interest rates assumed in this projection anticipates a further

rise in the bank rate," he said in a press conference after the publication of

the quarterly Inflation Report

The currency traders don't appear to have latched onto this point yet but what Merv is saying is that they need one more quarter point increase to keep to a central projection which itself has risks to the upside. In other words, rates are, on balance, likely to rise above 5.75%

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Guest Shedfish
No units for the y-axis on the CPI chart, handy eh?

They remind me of an electron cloud model, just less accurate.

:lol::lol::lol:

Heisenberg -

i'm not really sure...

<kerching>

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The currency traders don't appear to have latched onto this point yet but what Merv is saying is that they need one more quarter point increase to keep to a central projection which itself has risks to the upside. In other words, rates are, on balance, likely to rise above 5.75%

My interpretation of that statement reads:

"Gentlemen, it is my duty to avoid revealing the Bank's intentions in specific terms, so the fact that I'm admitting that we're likey to raise rates at least once should be interpreted to mean that there are other rate rises coming that I'm not going to admit to."

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My interpretation of that statement reads:

"Gentlemen, it is my duty to avoid revealing the Bank's intentions in specific terms, so the fact that I'm admitting that we're likey to raise rates at least once should be interpreted to mean that there are other rate rises coming that I'm not going to admit to."

Hang on a minute - did Mervyn say not a fornight ago that he was not going to engage in managing monetary policy by 'codeword' in the way that the ECB do with their 'strong vigiliance' statement that is usually taken to mean a rate hike is certain?

Is Mervyn not doing the same thing here or is he merely engaging in 'expectation management' by conceding another rate hike is figured into the forecasts and then that gives the MPC room to backtrack if necessary by putting in a few holds to see how things pan or chuck in another quick hike if the inflation figures surprise to the upside again. He may even have room to claim success if the MPC manages to avoid a rate hike for a while by saying they were just being ultra cautious and thankfully things did not turn out as bad as they feared because their earlier rises did the trick.

Edited by Wad

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Here are a couple of pics showing the BoE expectations and the reality of the CPI.

It seems the BoE tend to understate the actual levels quite frequently.

The 2 yr forecast from May 05 to May 07 is quite telling, and the Feb 06, when IR were 4.5% I think, shows the main range staying on the 2% target when in reality they are behind the curve and chasing CPI upwards.

inflationforecastssu5.jpg

inflationforecasts1ta7.jpg

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Here are a couple of pics showing the BoE expectations and the reality of the CPI.

It seems the BoE tend to understate the actual levels quite frequently.

The 2 yr forecast from May 05 to May 07 is quite telling, and the Feb 06, when IR were 4.5% I think, shows the main range staying on the 2% target when in reality they are behind the curve and chasing CPI upwards.

inflationforecastssu5.jpg

inflationforecasts1ta7.jpg

quite true - first thing I noticed was that the reality in Feb07 was above the very upper limit forecast not 12 months previously! So how on earth can they continue to look 24 months ahead using these methods with any continued confidence?

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Here's what you all want to see:

untitledfl2.jpg

So, interest rates are up again soon.

when was that chart created? , it looks like the predictions started in jan with a predicted drop starting in jan, but we all know it rose, so why havent they re-edited the graph?

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