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thedebtisreal

You Heard It Here First

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Don't worry, I don't have a little bird, but watching the events of the past few weeks unfold, a picture seems to emerge.

The outgoing governor King voting for an increase

The sharp movement in the bond yield

The backing of the new deputy governor Gieve

Persisting hawkishness of Brown's latest recruits, Sentance and Besley

The trouble in the credit markets

Brown's promise, to fix the housing market (and since when has he ever cut taxes to achieve anything) while distancing himself from any crash fallout

The eco-towns and the need for investment cash flows

The tightening in Japan

The complete refusal of the fed to lower rates

The unending rising of the euro rate

Blair and his smug portfolio of property.....

All the hawkish four needs is one jobsworth from the doves and a deal can be done.

Discuss.

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It will be zero. They will wait a month due to negative sales and other figures and the potential impact of the terror alert.

I agree. There will be no rise this month. Next month yes, but not at the moment.

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Don't worry, I don't have a little bird, but watching the events of the past few weeks unfold, a picture seems to emerge.

What has PG's bird been beeping lately about rates?

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It will be zero. They will wait a month due to negative sales and other figures and the potential impact of the terror alert.

29th June 2007

http://money.cnn.com/news/newsfeeds/articl...13-17807050.htm

Oil futures spiked above $70 a barrel on Thursday for the first time since Sept. 1 on a government report that showed gasoline inventories dropped unexpectedly as the summer driving season neared its peak.

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Smart money is on a .25% increase, so who knows.

Of the choice between 0 and 0.5 - it'd have to be zero. No appetite for a market shuddering 0.5% IMHO - although probably warranted.

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Guest grumpy-old-man
0.25% hike is a cert IMO. I've already bet my best pants on it dammit!

you have indeed. ;)

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They are going up. Look at the Betfair odds and gilt yields. If they don't go up the BoE will have to print more money to buy treasury debt, because the bond market will just bid them down, and that will only expand M3.

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Smart money is on a .25% increase, so who knows.

Of the choice between 0 and 0.5 - it'd have to be zero. No appetite for a market shuddering 0.5% IMHO - although probably warranted.

The way the market is right now, a 0.5% increase would cause less of a shudder than a hold.

I'm just saying, the appetite for debt among investors took a HUGE fall last week. Gordie's gonna want to draw investment for all his eco plans. He's not going to be able to do that if he let's the pound take a hit.

I'm not saying it is the most likely outcome, this is more intuition than research, but 6% by Friday has a weird ring to it.

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you all actually 'heard it first' last month, after they held again. The little birdy tweeted a rise of 0.25% for July - search for the thread if you are interested.

His tweetings are no better than 50-50 at the mo though, so I wouldn't bet on him. Even though he does have lovely plumage.

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This sort of pre-emptive, decisive and strong action is simply not the MPC's forte, I'm afraid.

A 0.5% hike will come about at some point, but not until the public & markets have been prepared first. Such a hike was mentioned in the minutes when they hiked the last time, the next step would be for one or two to vote for it... but a majority? That's a few months away, I reckon.

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.25% rise, betfair seems spot on with predictions, betfair are predicting .25% as an almost dead cert, .5% is at 80 to 1, no change at 5 to 1

Edited by moosetea

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This sort of pre-emptive, decisive and strong action is simply not the MPC's forte, I'm afraid.

Remember August 2006? Remember January? The MPC is not adverse to a few nast surprises.

We'll see. I'll be around Thursday to gloat if I'm right. If I'm wrong, expect this thread to die a death and (in true HPC style) me never mention it again and pretend I said 0.25% all along.

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Much as I'd like to see it happen, I can't see them going from refusing to raise 0.25% one month to raising 0.5% the next.

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Why? Coz the BBC in their infinite wisdom say so?

because betfair (and the markets) are predicting .25% as an almost dead cert (1 to 1), the markets aren't wrong when the odds are at 80 to 1 as is the case for a .5% rise. No change is ALOT more likely than a .5% rise..

If you really think a .5% rise it possible, but a quid on at betfair and get back 80 quid. If you know there will be a .5% rise, you don't tell people on a forum, you put 1000k on a .5% rise and make 80k tax free! :o Of course if you know, others also know the market will shift with in minutes and it will be 1 to 1 on a .5%. Its not therefore were getting a .25% rise (or possibly a nochange as an outsider)

Can we have some realism please folks...?

Edited by moosetea

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we've had months of occasional 0.25 rises and ya think they are suddenly gonna go for a 0.5? Personally, im not convinced.

Prob get good odds it though.

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I only 50/50 on whether a 0.25% increase is a done deal therefore my betting money will stay firmly in my pocket.

I'm fairly certain rates will go up by 0.25%, but won't be betting on it because the odds are so poor.

BTW: I put £50 on a rise last month with odds of 6:1 and lost. I don't know whether I should be chuffed or disappointed that the vote turned out to be so close...

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