Jump to content
House Price Crash Forum
Ash4781

Will Darling Change The Inflation Target Tomorrow ?

Recommended Posts

http://www.telegraph.co.uk/money/main.jhtm...cnprices110.xml

The increase in prices is complicating the Monetary Policy Committee's job. Its remit is to keep inflation under control. However, with the housing market slowing rapidly and the wider economy expected to stumble in the coming months, its policymakers have acknowledged that they would be cutting interest rates faster were it not for their inflation target.

Change the target, and then get cutting!

Edit: think it's Wed oops

Edited by Ash4781

Share this post


Link to post
Share on other sites

The budget is usually about the winners and the losers. Why don't they consider the impact upon savers when the interest rates are reduced? And, surely, less interest on savings may well result in less money for the taxman. :angry: Personally, I can't stand to look at the smug faces of those politicians on the front benches as the Chancellor unveils his monetary policies. <_<

Share this post


Link to post
Share on other sites

Oh, but when houses were hyperinflating, it somehow wasn't their job to stop it?

Politicians and the media are a bunch of lying, self-serving pigs. They should be rounded up and shot.

There. I've said it. :angry:

Share this post


Link to post
Share on other sites
policymakers have acknowledged that they would be cutting interest rates faster were it not for their inflation target.

Oh dear what a mess. An economy based purely on paying for everything at some undefined point in the future.

Why not make the inflation target 10,000%? And then when they can no longer fiddle the CPI under 10,000%, make it 20,000%. Serious systemic problem here!

Share this post


Link to post
Share on other sites
Change the target, and then get cutting!

Or include falling house prices in the inflation index. I think the desire to cut rates is high and then blame the "very bad" banks/mortgage lenders for not passing on the cuts. The fact that the link between the BoE base rate and mortage rates has to a large extent been broken is lost on the masses and NuLabour know this. Hpc and repocessions will make mainstream news at some stage and they are vote losers. Our political leaders will do everything they can to make sure the fallout from Gordon's failing miracle economy does not stick to them and blame whoever they can. A series of rate cuts and fudged inflation figures will be dished up.

Edited by Harold Bishop

Share this post


Link to post
Share on other sites
Change the target, and then get cutting!

Edit: think it's Wed oops

My personal VI is quite simple; I think that the least painful way out of the whole mess is inflation, and plenty of it. Target should be 10%..

Share this post


Link to post
Share on other sites
My personal VI is quite simple; I think that the least painful way out of the whole mess is inflation, and plenty of it. Target should be 10%..

My personal VI is quite simple; I think that the least painful way out of the whole mess is to raise interest rates, and plenty of it. Target should be 10%..

Share this post


Link to post
Share on other sites
My personal VI is quite simple; I think that the least painful way out of the whole mess is inflation, and plenty of it. Target should be 10%..

Inflation is fine if you are in a secured well paid job and not needing to make large acquisitions (House!!) - not so good for those on fixed incomes.

Share this post


Link to post
Share on other sites
Or include falling house prices in the inflation index. I think the desire to cut rates is high and then blame the "very bad" banks/mortgage lenders for not passing on the cuts. The fact that the link between the BoE base rate and mortage rates has to a large extent been broken is lost on the masses and NuLabour know this. Hpc and repocessions will make mainstream news at some stage and they are vote losers. Our political leaders will do everything they can to make sure the fallout from Gordon's failing miracle economy does not stick to them and blame whoever they can. A series of rate cuts and fudged inflation figures will be dished up.

This sounds more likely than simply moving the CPI target window.

"Oh look, we've got super low inflation (house prices crashing by 20%, food and oil rising by 10%) so we can cut interest rates. Oh, the cut isn't passed on by the banks? We'll talk sternly to them next time we meet them, don't you worry."

Share this post


Link to post
Share on other sites

The trouble is, if they moved the goalposts, how would they deal with public sector wage demands which would inevitably spring up?

What a truly brilliant situation they've got themselves into. *****ers.

Share this post


Link to post
Share on other sites
Or include falling house prices in the inflation index.

How will that work? They'd need to give it some weighting. And if they did CPI may fall but the realized rate of inflation will cripple household budgets to the extent that CPI is a negative figure, while house prices fall at 10%yoy because the average family can't afford to feed themselves let alone pay the mortgage because their wages would be static.

Share this post


Link to post
Share on other sites

It is a terrible mess that they are faced with really. Talk about competing demands and priorities, I don't think I can ever recall a situation as bad as this in my lifetime.

If I were Chancellor in a government with less than 2 years until the next election, I wouldn't want a housing market crash nor would I want inflation, but in reality, I can't really stop either. The house prices are a function of available credit, of which I've recently lost control, and the inflation is a function of the demands from Asia, of which we lost control sometime between the opium wars and 1947.

Whatever he chooses to do is likely to be the economic equivalent of putting lipstick on a pig.

Share this post


Link to post
Share on other sites
My personal VI is quite simple; I think that the least painful way out of the whole mess is inflation, and plenty of it. Target should be 10%..

The least painful??? Not if you are a saver. Basically, inflation is a transfer of resources on those who save to those who borrow. It is a tax on savings. Those who do have assets quickly start to adjust, they dump nominal assets, particularly cash, which generates further inflation, and before you know it, we have massive capital flight.

Let us not forget that the UK is now little more than an offshore financial centre. A little inflation would cause the city of London some difficulty.

Once you start inflating, it is difficult to stop. Once society has enough of it, only a painful stabilisation and recession will put an end to it.

No, inflation has plenty of pain. It just takes some time for the agony to begin.

Alice

Visit My Website

Share this post


Link to post
Share on other sites
The trouble is, if they moved the goalposts, how would they deal with public sector wage demands which would inevitably spring up?

What a truly brilliant situation they've got themselves into. *****ers.

This might explain why they're trying to move public sector pay bargaining and rises to 3-yearly rather than annually? <_<

Share this post


Link to post
Share on other sites
My personal VI is quite simple; I think that the least painful way out of the whole mess is inflation, and plenty of it. Target should be 10%..

The best way out of the mess is for politicians and economists to stop tinkering (thinking they can fix/predict) a system which is governed by the laws of chaos. Leave the system to find it's equilibrium point (recession/depression) and then return to an upward trend. The more tinkering they do in the meantime the further the system will swing back and the more painful it will be all round.

Looks like houses are going in the cpi

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.