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Ash4781

Boe Says Inflation Risks Have `probably Receded'

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I suspect they are more concern about a recession now than inflation. Although the FED's cut looks incredibly inflationary it may not be enough to pull the US out of the nose dive. A few months should give us an idea and I do reserve the right to change my mind!

When do you think the recent 20% rise in milk and bread along with the shortly to be followed similar meat increases due to feed costs will show up in the CPI. I thought they would have made a big impact on yesterdays figures?

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As long as you don't drive, fly, pay council tax, buy rail tickets or eat any food you'll be fine.

Oh and mortgage exit fees are down, they are in the CPI, so for people paying OFF the mortgage, rather than just having to pay it, you are waay better off.

Now let's see, what's going down these days?

I know, let's include cocaine in the figures, that's getting cheaper.

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Taking into account the data on the real economy and financial market developments, the Committee agreed that the upside balance of risks to inflation in the August Inflation Report projections had probably receded. The outlook was now more uncertain. As stated in its August Inflation Report, the MPC was monitoring closely the evolution of both credit spreads and the quantities of credit extended, alongside all other data relevant to the outlook for inflation.

http://www.bankofengland.co.uk/publication...007/mpc0709.pdf

I can't find money supply mentioned in the report.

Edited by Ash4781

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Now let's see, what's going down these days?

I know, let's include cocaine in the figures, that's getting cheaper.

Must be already included in the CPI, can't see how the recreation component is anywhere near the mix level otherwise. Maybe the mix is that of those that compile the stats. :lol:

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Oh and mortgage exit fees are down, they are in the CPI, so for people paying OFF the mortgage, rather than just having to pay it, you are waay better off.

Now let's see, what's going down these days?

I know, let's include cocaine in the figures, that's getting cheaper.

Ipods, TVs, Computers.

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I suspect they are more concern about a recession now than inflation.

I know you are right here about that, but when Catpain Darling said the economy was sound, and when growth has been revised down to a strong, but below trend 2.1%, why is there a fear of a recession?

I wonder whether actually the point of fiddling CPI is for the public sector pay rounds rather than IRs.

They probably reason on the macro scale that if they keep pay low, they can keep IRs relatively low as well because low pay rises keep the lid on inflation.

Don't agree with the argument but I can see it being made.

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Is Merv still in charge???

LONDON, Sept 19 (Reuters) - The Bank of England made a surprise U-turn on Wednesday, offering to inject 10 billion pounds next into money markets in a bid to bring three-month interest rates down.

The BoE will then hold three further auctions at weekly intervals with the amounts to be decided later.

"This measure is being taken in order to alleviate the strains in longer-maturity money markets," the BoE said in a statement.

Governor Mervyn King had previously said that it was not the BoE's job to bring down three-month money rates.

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Must be already included in the CPI, can't see how the recreation component is anywhere near the mix level otherwise. Maybe the mix is that of those that compile the stats. :lol:

From the minutes "This was the largest monthly fall in the annual inflation rate in five years and reflected weaker prices for household goods prices and for food and soft drinks."

Edited by Ash4781

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Is Merv still in charge???

LONDON, Sept 19 (Reuters) - The Bank of England made a surprise U-turn on Wednesday, offering to inject 10 billion pounds next into money markets in a bid to bring three-month interest rates down.

The BoE will then hold three further auctions at weekly intervals with the amounts to be decided later.

"This measure is being taken in order to alleviate the strains in longer-maturity money markets," the BoE said in a statement.

Governor Mervyn King had previously said that it was not the BoE's job to bring down three-month money rates.

Maybe Merv' has resigned

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I know you are right here about that, but when Catpain Darling said the economy was sound, and when growth has been revised down to a strong, but below trend 2.1%, why is there a fear of a recession?

I wonder whether actually the point of fiddling CPI is for the public sector pay rounds rather than IRs.

They probably reason on the macro scale that if they keep pay low, they can keep IRs relatively low as well because low pay rises keep the lid on inflation.

Don't agree with the argument but I can see it being made.

but RPI is going UP and thats what the unions will be asking for as more people see their standard of living eroded. get ready for plenty more industrial action this winter....

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Is Merv still in charge???

LONDON, Sept 19 (Reuters) - The Bank of England made a surprise U-turn on Wednesday, offering to inject 10 billion pounds next into money markets in a bid to bring three-month interest rates down.

The BoE will then hold three further auctions at weekly intervals with the amounts to be decided later.

"This measure is being taken in order to alleviate the strains in longer-maturity money markets," the BoE said in a statement.

Governor Mervyn King had previously said that it was not the BoE's job to bring down three-month money rates.

stay away from the woods Merv !!

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Unfortunately the BoE's duty to maintain financial stability has come to the fore and is their over-riding concern now. No point in worrying about inflation if you don't have an economy for it to affect is there?

It's a bit like basic life support: first you secure the patient's airway, no point in doing anything else unless they can't breathe.

Edited by Smell the Fear

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Let's hope hotel accommodation isn't included in the basket:

http://www.ft.com/cms/s/0/07f78d3a-6640-11...0b5df10621.html

Obviously removed from the CPI. As will all meat owing to Foot & Mouth

However just placed in are trips to Disney, Harley Davidsons, anything on BOGOF at Asda, mortgages (The nice people on the Telly say its never been so underpriced).

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Obviously removed from the CPI. As will all meat owing to Foot & Mouth

However just placed in are trips to Disney, Harley Davidsons, anything on BOGOF at Asda, mortgages (The nice people on the Telly say its never been so underpriced).

...the Unions at the Labour Party Conference will tell Gordo they believe in RPI and not CPI..... ;)

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Unfortunately the BoE's duty to maintain financial stability has come to the fore and is their over-riding concern now. No point in worrying about inflation if you don't have an economy for it to affect is there?

It's a bit like basic life support: first you secure the patient's airway, no point in doing anything else unless they can't breathe.

This is correct.

The BofE is now aware that the banking system itself is at risk.

Inflation is now a side issue.

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