evictee Posted September 5, 2007 Share Posted September 5, 2007 With three month LIBOR now standing more than 1% clear above base rates, does Thursday's MPC decision actually have any practical impact one way or the other, apart from any message it sends? Quote Link to comment Share on other sites More sharing options...
OzzMosiz Posted September 5, 2007 Share Posted September 5, 2007 Yes my savings rate doesn't increase further! Quote Link to comment Share on other sites More sharing options...
evictee Posted September 5, 2007 Author Share Posted September 5, 2007 Yes my savings rate doesn't increase further! Doesn't it? Quote Link to comment Share on other sites More sharing options...
laurejon Posted September 5, 2007 Share Posted September 5, 2007 The rate decision has become irrelevent because the people who borrow are the reckless, if rates were 25% they would still be in the high street searching for the 50% off Gucci handbag for the Saturday night out on the lash with the girls. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted September 5, 2007 Share Posted September 5, 2007 The rate decision has become irrelevent because the people who borrow are the reckless, if rates were 25% they would still be in the high street searching for the 50% off Gucci handbag for the Saturday night out on the lash with the girls. So that's what Barclays have been up to! Quote Link to comment Share on other sites More sharing options...
Jason Posted September 5, 2007 Share Posted September 5, 2007 I really don't think they would dare change the rate. Well the knob blanchflower may vote for a super cut because he has no sense of reality. The BoE are probably really worried, as they ain't got a clue what will happen; just look at the unprecedented tactics they are using. Quote Link to comment Share on other sites More sharing options...
starsign Posted September 5, 2007 Share Posted September 5, 2007 The BoE are probably really worried, as they ain't got a clue what will happen; just look at the unprecedented tactics they are using. what are these unprecedented tactics? I, for one, think a hold is the right thing for the BoE, given their responsibility on inflation...until the trend become clearer. Quote Link to comment Share on other sites More sharing options...
Jason Posted September 5, 2007 Share Posted September 5, 2007 Dropping the discount rate to the same as the repo rate; which is going against what they said only a few weeks ago. Quote Link to comment Share on other sites More sharing options...
Charlie Don't Surf Posted September 5, 2007 Share Posted September 5, 2007 To tell you the truth I'm more interested in the ECB decision tomorrow. If they raise then it's game over in Ireland and Spain and a big blow to sentiment here. It also won't make money any cheaper at the end of the day Quote Link to comment Share on other sites More sharing options...
kilroy Posted September 5, 2007 Share Posted September 5, 2007 Dropping the discount rate to the same as the repo rate; which is going against what they said only a few weeks ago. only for o/n lending though. 3m is where the trouble is. Quote Link to comment Share on other sites More sharing options...
Fairies Wear Boots Posted September 5, 2007 Share Posted September 5, 2007 Is there any chance that inflation will be back up quite a bit? It went down to 1.9 %, apparently on the back of supermarkets having a price war and furniture going down too. So if they put em back up, can it go up to 2.5 ? And hence another rate rise? It seems people on here don't think so. Recently rate setting meetings would spark a rash of predictions. It's been dead quiet on here. Two months ago, 'irrelevant' definitely wasn't the word. Quote Link to comment Share on other sites More sharing options...
Selling up Posted September 5, 2007 Share Posted September 5, 2007 It seems people on here don't think so. Recently rate setting meetings would spark a rash of predictions. It's been dead quiet on here. Two months ago, 'irrelevant' definitely wasn't the word. Well, I think some of us are still reeling from the kick in the monetary balls that we got last month: IE being told that inflation is below target while we watch prices rise. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted September 5, 2007 Share Posted September 5, 2007 If they raise then it's game over in Ireland and Spain and a big blow to sentiment here. It also won't make money any cheaper at the end of the day The property bubble in Ireland is finished, now they have to deal with the bust. I suspect it will be almost as bad as the Japanese housing bust of the last 17 years, but without the luxury of time. Goodbye Celtic Tiger. Quote Link to comment Share on other sites More sharing options...
Red Baron Posted September 5, 2007 Share Posted September 5, 2007 (edited) The MPC is an irrelevance and has been since 2005 when they lost their nerve, and with it the plot, by their foolish cut in IRs. History will revile them for unleashing the curse of inflation once more and the building of a monstrous asset bubble. Nowadays the MPC simply resembles that famous group of three monkeys - 'I hear nothing', I see nothing', 'I say nothing'. A gutless collection of superannuated and stupid 'Botty Boys' in place simply to do Brown's bidding. Edited for an explanation of the term 'Botty Boy' I have a wonderful little book published by Perkins in the 1930s which explains the use of colloquial english. Under the heading of 'Botty Boy' it lists the following: Queer, Homo, Pervert, One who is prepared to 'bend over' for remuneration. Edited September 5, 2007 by Red Baron Quote Link to comment Share on other sites More sharing options...
Pakard Posted September 5, 2007 Share Posted September 5, 2007 Well, I think some of us are still reeling from the kick in the monetary balls that we got last month: IE being told that inflation is below target while we watch prices rise. Inflation is currently bellow their target...what about in 2 years time. I can see inflationary pressure...what about you. Quote Link to comment Share on other sites More sharing options...
Mr. Gruff Posted September 6, 2007 Share Posted September 6, 2007 I, for one, think a hold is the right thing for the BoE, given their responsibility on inflation...until the trend become clearer. The last inflation report suggested that inflation should be 2% in 2 years time, providing the interest rates follow market expectations. At that time the market was expecting a .25% rise in approx 3 months, and a further one later in the year. Times have changed though, inflation fell by more than was anticipated, (although not very much more!) and the markets all went to shit with lots of bear chat around. They have two options now, I suspect, either try to prop up the markets by taking this as the peak of IRs, or raise them to combat the coming inflation. I know what their remit is, and I know their actions in the past. I'm going for a hold, followed by later drops. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted September 6, 2007 Share Posted September 6, 2007 Merv and the Muppets are now, at best, "window dressers." The power to change the direction of the markets rests with the credit markets--it always has in reality. Big Al discovered this when he found that hiking the Fed rate actually sent IR down in the US. Subprime etc. was driving the economy, not the Fed. That is why I believe Big Al should NOT be held responsible for the credit bubble--he tried to stop it. The regulators should have restricted irresponsible lending practices--that was not the Fed's (or the BoE's) remit. The blame rests with the government. Al warned them with his irrational exuberance and "froth" speeches. Merv warned us, IIRC 2 years ago, that house price were illusory whereas debt is real. No one listened and the governments failed to act. When the bubble pops here Gordon will be standing in the spotlight. Or, as Warren out it, on the shore without any trunks on. Quote Link to comment Share on other sites More sharing options...
expatowner Posted September 6, 2007 Share Posted September 6, 2007 Politicians will blame industry practices. "Industry" will blame individuals greed. Individuals will blame politicians. Quote Link to comment Share on other sites More sharing options...
sunonmars Posted September 6, 2007 Share Posted September 6, 2007 its kinda all over the place, so who can guess what the MPC will do, they seem to be erratic at present, perhaps too much wine flowing in the meeting chambers. Quote Link to comment Share on other sites More sharing options...
Selling up Posted September 6, 2007 Share Posted September 6, 2007 Financial bod on Today R4 just now said the base rate has become irrelevant. Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted September 6, 2007 Share Posted September 6, 2007 Just a quick note this morning: the MPC is meeting as every month to decide on interest rates. Personally, I think they should raise them, to kill the house price inflation agonising beast once for all, but I don't see them doing anything but "remaining vigilant", which means doing nothing at all. Actually, I have a little suspect that they would cut the IR by a quarter of a point to "lubricate" the cogs of the Finance world. Except, it won't work. Credit is drying up, banks are no longer willing to lend stupid amounts of money to people who can't repay them back. Don't forget that the subprime crisis has just started. The million-pound bonus bankers themselves admit that they don't know where the toxic waste is in the sea of debt their banks created.... Cheers Quote Link to comment Share on other sites More sharing options...
Willy Weasel Posted September 6, 2007 Share Posted September 6, 2007 The fact that the base rate is currently irrelevant makes me think that this would be a good time to raise rates becaused no-one is currently borrowing at base rate as it is. All the recent data has pointed towards upside pressure on inflation. If they look at the numbers, the committee would have to conclude that the risks to the upside identified in the last Inflation Report are crystallising. Don't forget that the Bank's central projection ie assuming none of the risks to the upside crystallise assumes one further rise. IMHO we could see a rise today and another between now and the end of the year. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted September 6, 2007 Share Posted September 6, 2007 The fact that the base rate is currently irrelevant makes me think that this would be a good time to raise rates becaused no-one is currently borrowing at base rate as it is. All the recent data has pointed towards upside pressure on inflation. If they look at the numbers, the committee would have to conclude that the risks to the upside identified in the last Inflation Report are crystallising. Don't forget that the Bank's central projection ie assuming none of the risks to the upside crystallise assumes one further rise. IMHO we could see a rise today and another between now and the end of the year. sound logic. Don't expect it to be applied by the MPC. Quote Link to comment Share on other sites More sharing options...
Crashman Begins Posted September 6, 2007 Share Posted September 6, 2007 I thank them for thier lack of attention. Lets see if theyve now woken up. Quote Link to comment Share on other sites More sharing options...
R K Posted September 6, 2007 Share Posted September 6, 2007 I think the Bank have got it spot on. Rates and policy. They will hold. Their statement yesterday confirmed that they will not be supporting bad lending practices, and Bob Diamond can basically f*ck off and sort his own business out. As he should. As the Bank pointed out short-term liquidity is there if it is needed. I think they will let the markets discover who the most vulnerable lenders are and punish them. Northern Rock seems favourite at the moment.(in fact they are desperately trying to raise savers funds by ramping interest rates). There is no reason to raise rates with the banks doing it for them at the moment, and since a cut would not provide more liquidity but just help the profligate lenders and there is neither an inflation argument nor a slowing growth argument, I can't see why they would go there. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.