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Could Thursday Be Merv's Last Chance To Be A Man

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If a rise on Thursday is delayed, will the BOE have lost it's final chance to be professional?

6% on Thursday should really be a done deal, or will they put it off until closer to Christmas? :blink:

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No chance of a rise in IRs for at least a couple of months IMO. Probably just one (maybe 2) before the end of the year. Back-to back rises would be far to scary for most. :ph34r:

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rates will be held this time - no doubt turmoil in financial markets will be raised and shadow mpc voted 5-4 for a hold today...

http://www.economicsuk.com/blog/000540.html#more

Shadow MPC votes 5-4 to hold Bank rate

Posted by David Smith at 08:59 AM

Category: Independently-submitted research

At its latest, and tenth anniversary, meeting, the IEA’s Shadow Monetary Policy Committee (SMPC) voted to hold the official Bank Rate in August by a narrow five/four majority. Looking further ahead, there was an unusually wide spread of biases. Some SMPC members thought that Bank Rate was either at, or approaching, its peak while other members of the committee thought that a further rise, or rises, would be necessary, even if Bank Rate was raised by ¼% to 6% on 2nd August.

The divergence of views held by the individual SMPC members mirrored an apparent similar lack of agreement on the MPC itself. The main causes seemed to depend: firstly, on how much weight should be attached to the continued rapid growth of broad money and credit; and, second, whether the slow growth of average earnings should be regarded as a more significant measure of the pressure of demand than the relatively strong figures being reported for the growth in national output and retail sales. The SMPC meeting was held on Wednesday 18 July, before the release of the ‘flash’ estimate of UK Gross Domestic Product (GDP) in 2007 Q2, on Friday 20 July. However, no SMPC member chose to alter his vote in the light of the new information.

Among the individual contributions, Tim Congdon questioned the consensus view that inflationary pressures would ease significantly in the short-term: he thought that higher food and oil prices were likely to offset the pre-announced reduction in domestic energy costs. Patrick Minford argued that the de-regulation of the financial system meant that broad money and credit no longer had any significance, other than as indicators of the portfolio choices of individual economic agents. Peter Warburton emphasised the difference between the financial pressures on the household sector, and the far stronger position of companies, while John Greenwood preferred to wait and see the effect of the July rate increase before advocating another hike, even if he maintained a bias to rise.

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The thread title is significant, IMHO. If Merv takes his chance to be a man but is outvoted again (which I think is a more likely outcome than an actual rise), I wonder how the markets will react to that?

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If a rise on Thursday is delayed, will the BOE have lost it's final chance to be professional?

6% on Thursday should really be a done deal, or will they put it off until closer to Christmas? :blink:

.....holiday month .....no chance of movement...... :o

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If a rise on Thursday is delayed, will the BOE have lost it's final chance to be professional?

6% on Thursday should really be a done deal, or will they put it off until closer to Christmas? :blink:

A 0.25% rise is on the cards for later on in the year,The previous rises are having the desired affect on HPI i think they will save the next rise for other inflationary factors which may be around the corner.

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A 0.25% rise is on the cards for later on in the year,The previous rises are having the desired affect on HPI i think they will save the next rise for other inflationary factors which may be around the corner.

...is it not the case they are focusing on CPI which does not included housing or it's related costs.....?

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I'm expecting a strong reference to the oil markets.

"Inflationary pressures in the medium term remain elevated" or something to that extent.

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Guest Charlie The Tramp
Could Thursday Be Merv's Last Chance To Be A Man

Is not the thread title incorrect. :)

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The muppets failed to do their job so the market is doing it for them.

1. Credit is tightening.

2. House prices are falling/zero growth in all the regions of the UK now bar 3 (if Hometrack's latest is right).

3. SM is crumbling.

4. Sterling is headed down.

5. Unemployment is headed up.

6. Trade deficits are widening.

7. Gordon is about to reap what he has been sowing for the last 10 years.

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The muppets failed to do their job so the market is doing it for them.

1. Credit is tightening.

2. House prices are falling/zero growth in all the regions of the UK now bar 3 (if Hometrack's latest is right).

3. SM is crumbling.

4. Sterling is headed down.

5. Unemployment is headed up.

6. Trade deficits are widening.

7. Gordon is about to reap what he has been sowing for the last 10 years.

I noticed that sterling dropped sharply over the last few days. In your opinion, has it peaked, and what happens next? I'm talking in relation to the dollar by the way.

Edited by Far Out Bear

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I noticed that sterling dropped sharply over the last few days. In your opinion, has it peaked, and what happens next? I'm talking in relation to the dollar by the way.

IMO, sterling has peaked. The turnarond is all to do with HPI and what Merv does in relation thereto. As I have stated before, sterling's run has been closely tied to HPI in the minds of the currency markets. We were the last major economy to see Gresat Crash 2 arrive which has delayed the inevitable.

I think Merv has finished hiking. The SM is too nervous and our debt problems are enormous with London being the most overgeared City on the planet. Sheeple are overgeared like they have never been before and another hike will simply push them over the eedge that much quicker as they no longer have access to miracle ecnomy cheap and easy credit.

Without high IR why hold sterling? With all the risks to the downside my bet would be that the traders will want to diversify a lot more and possibly move some cash back into the US$, Swissies, Yen. IMO, the Euro faces the same fate as sterling but a little more delayed. I.e., down.

According to the FX sterling's high today was 2.0247. It is currently down slightly to 2.0232. Nothing dramatic yet.

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I noticed that sterling dropped sharply over the last few days. In your opinion, has it peaked, and what happens next? I'm talking in relation to the dollar by the way.

...possibly a blip re profit taking in the world markets.....sentiment on BoE unlikely to raise interest rates this week may calm it's previous upward trend against USD..... :unsure::unsure: .....who knows with today's prospect of mayhem in all markets.... :o:o

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I can't see a hike in August - more likely to be September.

but it will still be fun waiting for a possible shock hike :rolleyes:

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Guest Popalot

The variable we have not factored in her is nasty new inflation figures creeping out at some point in the next few "holding" months.... That energy blip has come and gone..... ;) Oil and food are rising like they haven't done for many years....and together. Even Rachel Lomax knows this is a storm brewing on the horizon, and it will break during her gov'ship....

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Guest AuntJess
No chance of a rise in IRs for at least a couple of months IMO. Probably just one (maybe 2) before the end of the year. Back-to back rises would be far to scary for most. :ph34r:

I agree. There would be widespread panic if it happened. :o

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Will they get a preview of the inflation figures this month? If so, and we have an upward movement or no change, that may change a few minds?

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I think the markets have got wind of the fact that the MPC has decided to abandon the 2% target and hence the pound is off its recent highs.Apparently a bit of flooding and a correction in the equity markets is sufficient to call a halt to raising rates.

Rather worrying this.Core inflation is at its highest since March 1997,food is about to take off into orbit and we are unlikely to see last winters oil and commodity lows.The spineless b******ds on the MPC have decided to hide behind one off deflationary effects which should mean CPI hitting 2% this Autumn*,if it does that will mean 3% CPI by next year(we should be at about 1% by now,just as we were at 3% last Winter because of one off inflationary effects)

The proof of the pudding that the MPC have abandoned the target is that if they had a gun to their heads to keep within the 1%-3% range they would be calling an emergency meeting today and immediately raising a full percentage point even Rachel frigging Lomax.

*Merv promised it.

Edited by crashmonitor

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