Bank Of England Could Spring Surprise Interest Rate Hike

[ripandcap]

I would have gone for a cut but with m4 up i would say a hold.

http://www.bankofengland.co.uk/statistics/...8/jun/index.htm

[Ulfar]

Mystic Merve needs to polish his crystal ball, if he is basing rate decisions on what is going

to happen in 2 years.

He must have been pissed for most of 2005 + 2006.

[yokel]

There's a nice article in Private Eye today - the `Called to Ordure' column describing Merv's appearance before the Treasury Select Committee.

" Mervyn King, previously the dullest of Dereks, was recently given his second term as Bank Governor despite tensions with Alistair Darling (he thinks Darling is a t*sser and the feeling is richly reciprocated)"

The article goes on to describe a coded argument about who leaked the news that Northern Rock was in trouble - the MPs blamed the B of E, Merv blamed politicians (possibly meaning Darling).

If the article is accurate about the relationships, Merv might not feel too constrained to do what Ali D wants re interest rates. Lets hope so.

Y

Edited August 6, 2008 by yokel

[Slumpmonkey Returns]

HBOS house price data always comes out on the morning of an MPC rate setting decision. I expect another large fall in HBOS House Price figures of between minus 1.5 and minus 2.5%. HBOS will be hoping that this will put pressure on MPC to hold. However, I agree with Ma-Ku, many lenders have been reducing rates in past few days - are they expecting a hike?

[Moo]

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.

Which makes even more sense we you consider they appeared to do the opposite (hike just before rate day) around the time of the last three cuts, so they could "pass on the cut". I may be reading far too much into this, but a number of them (Abbey, I seem to remember as an obvious one) did hike suspiciously close to a nailed-on cert cut rate day.

[godless]

I'll go for a hold but a chance of a .25% cut

[interestrateripoff]

Mystic Merve needs to polish his crystal ball, if he is basing rate decisions on what is going

to happen in 2 years.

He must have been pissed for most of 2005 + 2006.

Just negligent, Churchill managed to win a war pissed.

[Yoss]

I'd vote for a 1% rise, show the market that the BOE don't feck about when it comes to inflation, force industry to trim the fat and set us up for a massive rally once the weak have been weeded from the herd.

Sure for those paying an average (100K) mortgage, it would mean a £64 a month increase in the cost of a mortgage, but the cost decrease in gas/lecky/food and petrol gained from a stronger pound would offset alot of that pain.

But my money would be on "Hold" as although I think Merv would have the spine, I doubt the poltical will exists, house prices and the misguided percieved wealth HPI brings is what need sorting, saddly no one has the balls to address it.

[Patfig]

Come on Merv get yer conkers out and show Quisling and Ali D what you are made of, they'll be gone before you anyway!

[Chrysalis]

Inflation hurts a lot more voters than interest rate rises.

indeed, inflation hurts everyone, dropping house prices only hurts house owners and we all know a interest rate cut isnt going to prevent the cycle.

[hedgefunded]

Boring old hold is my guess.

[Paddles]

It'll be a hold but there will more than 1 vote for a rise this month to set expectations for September's rise.

[BLOW FLY]

0.25% cut

[aliveandkicking]

Hold with pressure on to increase. Rates are already too low.

[red]

It's a hold with bells on, for Chrissakes...

[Ash4781]

http://www.ft.com/cms/s/0/79da1340-631b-11...00779fd2ac.html

Edited August 6, 2008 by Ash4781

[interestrateripoff]

Anyone know what the rate of money supply growth is in developing nations?