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Bank Of England Could Spring Surprise Interest Rate Hike

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The Bank of England could shock markets with an interest rate hike on Thursday to keep inflation in check, despite expectations for no change because of slower economic growth, analysts said.
"Pressures for higher rates are likely to linger on the committee," said Investec economist Philip Shaw, who is calling for no change this month.

"Overall we cannot entirely rule out the risk that the committee will sanction higher rates this time.

"Inflationary pressures continue to prevent the MPC from cutting rates in response to the deteriorating real economy," added Capital Economics analyst Vicky Redwood.

"In fact, if interest rates change this month, they are more likely to go up than down."

A rise is long overdue - could we see some action from Merv tomorrow, or another hold??

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Rise

A rise is long overdue - could we see some action from Merv tomorrow, or another hold??

I am expecting another hold, we can be fairly sure that at least one of the members will be arguing for a cut, which would proabably persaude at enough of the others that a raise is not required. Persoanlly a cut would suit me as I am on a tracker, but it wont make a great deal of difference unless the moves are dramatic in one direction or another.

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Guest Winnie

The three factors which seem to loom most over this decision are:

1. Brown/Darling status/ future - they will be ebing lent on heavily to hold or even cut which is against Merv's beliefs - he may weigh up how strong their hold on office is......... August was always the month for a "bad news" rise, when people are on hols.

2. How much credibility they have in holding when the inflation report this quarter will be the worst for years

3. Bernanke's stance - I suspect he would have liked to have started cutting but inflation also holds him back too.

I suspect we will have the highest chance for a hike for many months.

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The three factors which seem to loom most over this decision are:

1. Brown/Darling status/ future - they will be ebing lent on heavily to hold or even cut which is against Merv's beliefs - he may weigh up how strong their hold on office is......... August was always the month for a "bad news" rise, when people are on hols.

2. How much credibility they have in holding when the inflation report this quarter will be the worst for years

3. Bernanke's stance - I suspect he would have liked to have started cutting but inflation also holds him back too.

I suspect we will have the highest chance for a hike for many months.

Merv the perv needs to get his balls out and lead the way, take charge, the US can tag along behind us for a change.

He will benefit from it.

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?? What's he been up to? Thought he had a very staid reputation.

Maybe I am confuding him with an Ozzie cricketter or was that merv the swerve.

Or has he been having a bit of Krusty.

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Rise

A rise is long overdue - could we see some action from Merv tomorrow, or another hold??

No danger of a raise, no one will want to take the blame for the mess - the BOE raises, NuLab will automatically blame them for everything (not that they are entirely innocent but we know what our Prime Minister is like)

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No way they'll risk putting interest rate up. From a purely political standpoint it would be seen as "kicking the electorate (with higher borrowing costs) whilst they're down".

Whatever the logic they'll be keen to be seen to be doing the right thing by "the people", so that's a hold, or even a drop (but most likely a hold).

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One can speculate on an interest rate hold or hike... but there is one certainty in life: we already know who is going to vote for a cut!! :lol:

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No way they'll risk putting interest rate up. From a purely political standpoint it would be seen as "kicking the electorate (with higher borrowing costs) whilst they're down".

Whatever the logic they'll be keen to be seen to be doing the right thing by "the people", so that's a hold, or even a drop (but most likely a hold).

Is holding best for the electorate? The boil needs lancing.

Thye have a prime target in inlfation and it is over by a long way. They have to rasie rates regardless.

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Every time I hear from an economics editor on TV or in a paper that the MPC are setting rates looking months ahead, I think b****x.

If this were the case, why did they cut rates in April as inflation was forecast by just about everybody to be rising through the summer?

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Guest KingCharles1st

You mean they should now do what they should have done in Autumn 2005!! :blink:

Horse- stable- bolted

Its just now going to be another kick in the nuts for anyone left standing after 2008 and the biggest fucc up by a leader past present and future.

I agree tho, Merve should take the high ground on this and poke all the other pillocks in the eye with a sharp stick

Edited by KingCharles1st

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i'll go for hold with a slight chance of a reduction.

Have you all forgot about browns pleadge to help the housing market ?

BoE independants :lol: i think not.

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No way they'll risk putting interest rate up. From a purely political standpoint it would be seen as "kicking the electorate (with higher borrowing costs) whilst they're down".

Whatever the logic they'll be keen to be seen to be doing the right thing by "the people", so that's a hold, or even a drop (but most likely a hold).

Inflation hurts a lot more voters than interest rate rises.

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I think a few of the big lenders have reduced their mortgage rates a bit over the last couple of weeks. I think they are expecting a raise which will then be passed on, wiping out the recent reductions.

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I think a few of the big lenders have reduced their mortgage rates a bit over the last couple of weeks. I think they are expecting a raise which will then be passed on, wiping out the recent reductions.

It's going up!!

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Is holding best for the electorate? The boil needs lancing.

Thye have a prime target in inlfation and it is over by a long way. They have to rasie rates regardless.

I didn't say they were keen to be doing what's best, I said they were keen to be seen to be doing what's best.

What most people want is a cut in outgoings, and will see an interest rate cut as a step toward this (whether it is in reality or not).

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It doesn't matter what the BoE do, the economy is f***ed, if they are sticking to policy they need to be looking at what the situation will be in 18-24 months time what's going on now is irrelevant as Mystic Merv has already seen that in his crystal ball.

They are in a quagmire with no escape.

Do we really need any more repossessions to bring the economy under control?

The objective of economic policy is to make people unemployed to control the economy, the problem is no one really has a clue over how many that is. 1m, 2m, 3m, 4m

One thing is for certain it won't be anyone on the MPC losing their nice little job at the taxpayers expense.

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