Thursday, Jun 08, 2006

UK Interest rate on hold at 4.5%

Bank of England: Bank of England Maintains Interest Rates at 4.5%

As predicted the UK has kept UK interest rates on hold for the tenth month in a row.

Posted by webmaster @ 12:02 PM (504 views)
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18 Comments

1. denzil said...

Who was it that said rates would go up this month? Idiot!

Thursday, June 8, 2006 12:59PM Report Comment
 

2. uncle tom said...

Never mind Denzil...

That's 39 not out [smug..]

Thursday, June 8, 2006 01:14PM Report Comment
 

3. Dadm said...

At least the European Base rate has increased and is expected to increase each month until it hits 3.25%. That would be a 30% overall increase based on the original 2.5% earlier today.

I'd love to see at least half that increase in the UK, taking the base rate to 5.2%. The MPC can't fudge figures forever to hide inflationary pressures.

For those who have stretched themselves too far...........purchase some brown underpants as the next few months will be interesting times.

Thursday, June 8, 2006 01:21PM Report Comment
 

4. Waiting For The Crash said...

i am so fed up with the way this BOE system runs. Instead of dealing with problems they look at rigged data sip tea and pretend all is rosy???? Consumer spending up / house market looking good? WHat they mean is people are still borrowing at 4.5% and close to breaking point!!!

Someone tell me how many more months can the biggest cover up in history go on?

Thursday, June 8, 2006 02:07PM Report Comment
 

5. Paul said...

And the interesting thing is like inflationary expectations, the expectation of a rate rise will damage the economy more than an actual rise in rates.

So the longer the MPC continues to pretend not to hear the calls and pressure for a rise, the more uncertainty it creates.

The MPC are prize incompetents.

Thursday, June 8, 2006 02:12PM Report Comment
 

6. uncle tom said...

I still think it's more likely than not that we'll see more than one rate hike this year, and that the most likely UK rate at year end will be 5%.

There's a little bit of hysteria at the moment - which I think will blow over fairly soon - but beneath that the central banks of the developed world are slowly finding themselves caught between a rock and a hard place.

The consumer boom is heading for bust - and there's no clever solution in sight.

Thursday, June 8, 2006 02:25PM Report Comment
 

7. denzil said...

>>The MPC can't fudge figures forever to hide inflationary pressures.

The thing is whilst the Office for National Statistics (ONS) keep providing questionable monthly inflation stats the MPC's hands are tied.

On a related matter anyone notice the dip in the pound against the dollar the moment the MPC decision was made? Down 1.04% at the time of this message. With the Fed expected to raise for a 17th consecutive time later this month the downward pressure on the pound may force the MPC's hand.

Thursday, June 8, 2006 02:42PM Report Comment
 

8. denzil said...

Oh and BTW I always had complete faith in you UT ;-)

Thursday, June 8, 2006 02:43PM Report Comment
 

9. Ticktock said...

So the BOE is happy keeping base rates way below the level of (real) inflation is it?

It is happy to see asset bubbles continue to inflate accross the board as a direct concequence of this lax fiscal policy, and happy to directly support the transfer of wealth from young to old, and from poor to rich, that such a fiscal policy ensures?

Is this decission incompetence, or Cowardice?

Thursday, June 8, 2006 04:28PM Report Comment
 

10. Dadm said...

RPI for April was 2.6 which still seems low to me and CPI was 2.0.

Does anyone know of a more realistic measure of inflation?

These two measures both appear a fudge to me. Especially on the back of a 33% rise in fuel costs this year alone.

Thursday, June 8, 2006 05:11PM Report Comment
 

11. Dadm said...

A decent article from some time ago which seems to echo my feelings on the manipulated inflation figure:

http://personalfinance.iii.co.uk/articles/articledisplay.jsp?section=Tax&article_id=2643777

Thursday, June 8, 2006 05:17PM Report Comment
 

12. Nails said...

our gas bill was usally about 50 for quarter. This time it was near 150. Im sure thats not 2% inflation

Thursday, June 8, 2006 09:00PM Report Comment
 

13. Ticktock said...


Does anyone know of a more realistic measure of inflation?

It depends what you mean by inflation. The BOE does not wish to include asset price inflation in its calculations, just CPI, which suits its purposes better. However, anyone living in the real world knows that inflation is inflation, full stop. It cannot be neatly segmented to achieve a more desireable figure, for political ends, without building up big problems for the future.

Lets face it, the neo-capitalist system collapsed at the turn of the Centurary following the dot.com boom (which itself was a fiction designed to distract from the fact that the system had already failed). Global fiscal policy (i.e. low IRs) were a desperate attempt to salvage the situation, and have suceeded only in kicking the real problems into the 'long grass' . Nothing has been fixed, nothing at all.

The global economy is now a total fiction, fuelled by lies, central bank printing presses, and US military 'adventureism'.

The true concequences of such abstract failure are intollerable for the ruling global elite. After all, certain ideologies always predicted such an end, and have all sorts of 'old fashioned' views as to what should replace the status quo.

Before reality bites, i would suggest that the lies will get bigger, the deficits bigger, and the conflicts ever more bitter and widespread.

We are living through a period of major global change.

Thursday, June 8, 2006 10:03PM Report Comment
 

14. talking rot said...

Ticktock

Did you choose you name because you feel some link to clocks or to a certain brand of Red Bush tea?

I agree the current system has its faults but it is far better than the alternatives.

Thursday, June 8, 2006 10:39PM Report Comment
 

15. Joerushton said...

WATCH THIS INFLATION SPACE

Changes in foreign interest rates, like those seen in Asia and the USA recently, have the effect of raising the value of that countries currency. One of the reasons that the CPI is remaining statistically so low is that imports are currently so cheap. When the Asian currencies start ramping up, and imports start getting more expensive, watch the CPI jump dramatically. Then interrest rates will rise!!!!!!

Friday, June 9, 2006 06:11AM Report Comment
 

16. harold said...

I think we cannot underestimate just what a hot political issue interest rates are in this country - much more so than on the continent. Because the economy is supported by consumer spending, and because very large numbers of people have therefore been encouraged to push themselves to the limit, ANY increase in IR will be politically very damaging to Blair and the government. Blair is hanging on (probably aiming for 10 years in the job) and will therefore try to keep the economic charade going for a while longer yet.

Friday, June 9, 2006 01:39PM Report Comment
 

17. Ticktock said...

T.Rot.

The 'alternatives' are certainly much worse for some social groups.

I have no interest in clocks.

Friday, June 9, 2006 01:48PM Report Comment
 

18. Not So Fast Sherlock said...

Ticktock

In what sense had the global economy failed even before the dot.com crash ?

Friday, June 9, 2006 08:49PM Report Comment
 

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