Wednesday, Jul 19, 2006

When will UK interest rates rise again?

MoneyWeek: When will UK interest rates rise again?

UK inflation is now at its highest since Labour came to power in 1997. Commentators are still drivelling on about 'core' inflation, but since when was the price of suit hire more important than the price of petrol? So can we expect to see another hike in UK interest rates this summer?

Posted by mary @ 10:34 AM (530 views)
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6 Comments

1. denzil said...

I'm not convinced we will see a rise this year. Gordon has populated the MPC with his chums and is well aware that a rate hike will seriously affect the consumer and his miracle economy which has been kept afloat by the consumer.

I don't think we will see a rate hike while Gordon is attempting to take Blairs job.

Wednesday, July 19, 2006 10:48AM Report Comment
 

2. Blindleadtheblind said...

have to disagree with you there denzil, the important point is the expectation of the huge money markets, any move that suprises here will immediately hit the value of the pound, so with most other banks raising the BOE will pretty well be forced to go the same way...unless it wishes to devalue to pound...now thats a game I dont think they wish to play again. August rise it is then.

Wednesday, July 19, 2006 11:48AM Report Comment
 

3. Mortgage Master said...

August rise and stagflation? Don't think so - read the MPC minutes. The inflation is imported and no base rate rise will quell it - see the US economy at the mo - still inflation but the rate rises are killing off domestic demand. The notion that the MPC decision is politically motivated is ridiculous. Also, in my outlandish stupid comment of the day - why doesn't Gordie use fiscal policy to stop inflation? Cutting tax on fuel would stop inflationary pressure. Would it happen? No - there is a shortfall in the budget, and taxes are rising to put this right

Wednesday, July 19, 2006 12:16PM Report Comment
 

4. bidin'matime said...

"UK consumer price inflation has only once before hit 2.5%, back in September 2005. "

Oh, if only that were true! I remember not so long ago when single figure inflation was but a dream - and to assume that the dragon is slain would be unwise ...

Wednesday, July 19, 2006 01:21PM Report Comment
 

5. Bubbles. . . . said...

Blind...I agree with you the whole short coming of this is that we need to support our 1 but didnt Gordie sell off a large chunk of our Gold reserves last time to support the 1...At a bargin price (wish I had bought some!). But he cant rise them as then people wont buy houses!!! I mean really he wont get the huge amount of stamp duty he needs to plug the shortfall in his finances if houses continue to go up think about it his tax revenue goes up...And the inheritance tax come on feel sorry for him he needs every penny he can get, and if prices continue rising he will get more inheritance tax coffers....

Wednesday, July 19, 2006 08:04PM Report Comment
 

6. The Baldman said...

The only thing that has kept Gordans miricale economy working has been the housing boom generating tax revenues that have been wasted on government mis-spending. If rates rises we coulld see the end of the miricale. If rates do not rise the pound will be under pressure. Anyone seen the film Catch 22?

Thursday, July 20, 2006 10:59AM Report Comment
 

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