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Realistbear

" Central Bank Was For Now Not About To Change Tack Or Cut Interest Rates "

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http://uk.biz.yahoo.com/12092007/325/king-...ue-c-banks.html

Wednesday September 12, 10:41 AM

King says moral hazard issue for c.banks
LONDON (Reuters) - The latest market turmoil has been caused by a mispricing of risk and central banks need to balance moral hazard against a possible shock to the financial system, Bank of England Governor Mervyn King said on Wednesday....../
"Unless they (extra funds) were made available at an appropriate penalty rate they would encourage in future the very risk-taking that has led us to where we are."
Economists said this showed the central bank was for now not about to change tack or cut interest rates unless the market turmoil started to hurt the real economy.

Looks like Merv has been reading the VI ramping lately and has decided the market can handle a few more hikes? After all rents are rising to "record levels," "sheeple have plenty of dosh to save," and "HPI has accelerated to 2%." With such huge inflationary pressure building surely a decision to stand pat on IR would prove fatal to the bank's remit?

Foot. Shot self. In.

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