Wednesday, May 10, 2006

Bank of England signals Next move expected to be up

FT: Bank of England signals interest rates rise

The Bank of England on Wednesday signalled the next move in interest rates was likely to be up as the US Federal Reserve raised its main interest rate to 5 per cent.

Posted by David Goldfinch @ 10:58 PM (609 views)
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5 Comments

1. Uncle Tom said...

This comes as no surprise - I've been struggling to understand the logic of those who were predicting a rate cut.

I doubt that the bank's forecasts are fully up to speed with regard to the cost of Chinese goods - they are probably looking at graphs and predicting further falls.

The only downside I see to inflation is that caused by rising unemployment. Everything else looks firmly upward, so I see a steady increase in interest rates over the next couple of years.

I would not be surprised to see 5.5% at the close of '07 - 6% is not off the radar.

Thursday, May 11, 2006 10:40AM Report Comment
 

2. Markd said...

An interesting few months ahead to be sure.

It appears to have passed largely without comment (unless I have missed something) but the new Land Registry quarterly report for Greater London detailed below shows a drop of 5.67%. Is this correct?

Thursday, May 11, 2006 10:50AM Report Comment
 

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4. Rickyb said...

Those who were predicting a rate cut were either seriously misled, or were protecting their own interests by encouraging others to believe that there would be cuts. Notably mortgage lenders, who in the past few months have been convincing customers that interest rates would fall, and that they should take out variable rate mortgages, while quietly increasing the rates on their fixed term mortgages.

It looks as though high energy costs are finally starting to feed through to raw materials prices and to manufactured goods. I think many central banks may have underestimated the impact of these delayed increases in materials costs.

Thursday, May 11, 2006 11:11AM Report Comment
 

5. Gray said...

With the newspaper headlines about houseprice increases and the runmours of intrest rate cuts - The word 'Speculation' comes to mind!

Thursday, May 11, 2006 12:48PM Report Comment
 

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