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Realistbear

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Theres some moron on Bloomberg from Lloyds tsb and he's trying to paint it as all rosy, going on about no more rate rises and the market is all fine , move along nothing to see here attitude and you can tell by his voice he doesnt believe a word of it.

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Theres some moron on Bloomberg from Lloyds tsb and he's trying to paint it as all rosy, going on about no more rate rises and the market is all fine , move along nothing to see here attitude and you can tell by his voice he doesnt believe a word of it.

I think stagflation is a distinct possibility. HPC + credit crunch does not inflationary conditions make.

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I think stagflation is a distinct possibility. HPC + credit crunch does not inflationary conditions make.

Could be. After all stagflation is a British invention. Wikipedia:

Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession. The term stagflation is generally attributed to United Kingdom Chancellor of the Exchequer, Iain MacLeod in a speech to parliament in 1965.

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http://investing.reuters.co.uk/news/articl...0_BANK-VOTE.xml

Bank voted 9-0 for steady interest rates

Wed Aug 15, 2007 9:32 AM BST

Email This Article | Print This Article | RSS [-] Text [+] LONDON (Reuters) - Bank of England policymakers voted unanimously to keep interest rates at 5.75 percent this month, and most had no firm view on whether rates may need to rise further, minutes to the meeting showed on Wednesday.

Minutes from the August 1-2 meeting showed there was a range of views on the risks to inflation and growth and are likely to reinforce a growing belief among economists and investors that interest rates have peaked after five hikes since last August.

"The future path of Bank Rate would depend on the evidence in the months ahead about whether and how the risks were crystallising," the minutes said.

"Most members emphasised that they had no firm view on whether rates would need to rise further."

The Monetary Policy Committee was concerned about higher oil and commodity prices feeding through into inflation and some members also saw an upside risk to inflation from stronger employment, spare capacity and output price surveys.

The MPC noted that a lower inflation reading in June -- the decision was taken without knowledge of July's CPI slide to 1.9 percent -- cut the chances that inflation expectations would be dislodged.

"But the near-term outlook was still clouded with uncertainty, particularly about the path of household goods, food and utility prices," the minutes said.

The BoE signalled in its quarterly inflation forecasts last week that one more rate hike to 6 percent may be needed to bring inflation back to target in the medium term.

But on Tuesday, data for July showed consumer price inflation falling below the 2 percent target for the first time since March 2006. Policymakers had expected inflation to ease, perhaps sharply this year, but analysts said a annual reading of 1.9 percent last monthwould have probably come as a surprise.

August's rate decision was taken before financial markets were rattled by fears over liquidity and credit conditions, stemming from U.S. subprime mortgage market jitters.

The MPC said in the minutes that is was too early to tell whether the movements seen at the end of July and beginning of August would be sustained or go further.

"It might take time to see the full extent of these shocks, and for financial market prices to reach new equilibria," the minutes said.

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Drug pushers also give away cheap crack but once addicted, for some strange reason the prices goes up and the BoE wants your house or a dam load of interest payments now you have been suckered in.

where can i get my hand on antibiotics without pretending i'm ill down at the local doctors.

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"Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession"

The UK currently has low price inflation, high levels of output growth and low levels of unemployment, so its not immediately obvious to me quite why are period of stagflation is likely.

Can someone please explain, with some sort of reasoning if possible, why many on here consider that stagflation is likely in the UK.

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I think stagflation is a distinct possibility. HPC + credit crunch does not inflationary conditions make.

careful what you wish for, price inflation includes rent.....

Edited by moosetea

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"Stagflation, a portmanteau of the words stagnation and inflation, is a term in general use within modern macroeconomics used to describe a period of out-of-control price inflation combined with slow-to-no output growth, rising unemployment, and eventually recession"

The UK currently has low price inflation, high levels of output growth and low levels of unemployment, so its not immediately obvious to me quite why are period of stagflation is likely.

Can someone please explain, with some sort of reasoning if possible, why many on here consider that stagflation is likely in the UK.

The scenario would be: collapse of the domestic economy due to cheap debt no longer being available (mass unemployment in the city, no more MEW to spend in the High Street, etc) and although this would be deflationary and call for IR cuts to perk the economy up we would still be importing inflation in the form of ever rising oil and energy costs due to world supply falling behind world demand. Hence no IR cuts possible so economy can't be perked and stagnates. Voila, stagflation!

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