Wednesday, Aug 16, 2006

Bank discussed quick U-turn on rates

The Times: Bank discussed quick U-turn on rates

The Bank of England's Monetary Policy Committee (MPC) voted 6-1 to raise interest rates to 4.75 per cent earlier this month but the dovish tone of the minutes of their meeting today raised doubts over another rate rise this year."There would be time to reverse any increase should that prove necessary once the medium-term paths of demand growth and inflation became clearer," the minutes said, outling the thinking behind the rise.............

Well now, that's reassuring to know.

Posted by onyerhike @ 07:28 PM (504 views)
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11 Comments

1. uncle chris said...

Hmmmm .... I wonder what has them so rattled that they might need to instigate a quick u-turn. Nice to see the American voting against the rise, I wonder where his loyalties lie.

Wednesday, August 16, 2006 09:40PM Report Comment
 

2. Gm said...

If they thought a U turn was likely, they wouldn't have raised in the first place would they? Or at the very least they would have waited a month or two.

Wednesday, August 16, 2006 10:57PM Report Comment
 

3. Superuss said...

Spare Capacity? Look there really isnt that much spare capacity when the majority of people out of work are skilled in manufacturing and there arent any manufacturing jobs. And no im not observing that from "the north"... A very good smoke screen - thats what we are witnessing at the moment. If the masses never saw through this it might work. Alas, slowly but surely they will.

Thursday, August 17, 2006 12:30AM Report Comment
 

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5. sebastian said...

I thought they think two years ahead with these choices?

I guess like someone has said it's all about how the public see the rate rise as apposed to what the actually effects are.

Thursday, August 17, 2006 07:32AM Report Comment
 

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8. Waitingandwatching said...

Well it doesnt surprise me at all that they may be considering a U-turn especially in the light that the recent decision appears to be quite a drastic U-turn from the stance in the previous months.

If I remember correctly for months and months no one has voted for a rate rise (apart from the poor bugger that dropped dead) and this change of heart appears worrying. Surely the point having a voting panel is to balance the views of experienced experts.

As such I would expect to see a transitional phase before policies change rather than dramatic u-turns as seen here (although not unexpected). There can be only one of three reasons for them all changing at once.

1. They are all puppets on a string being controlled by someone else. (even then the controlling factor should not be so stupid as to change everyone at once)
2. They are all weak willed followers who tow the party line in fear of being ostracized or outcast. (In that case they should not be in their positions)
3. They have recently come into possession of information that the rest of us are not privy to.

Not sure which of these it does not give me confidence that we have a system of representation that only represents one side at a time.

Thursday, August 17, 2006 07:59AM Report Comment
 

9. Bfskinner said...

6-1 with one lone dovish tone is hardly the rosey scenario being touted by this article. I imagine the MPC already had an idea of what was comming in the July inflation report, but had their eye on the bigger worldwide picture. We all know inflation is really higher than it should be and inflationary pressures go far and beyond what the CPI would indicate. This Blanchflower fellow seem like a fool and a treasury stooge

BFS

Thursday, August 17, 2006 08:58AM Report Comment
 

10. waitingfor hpc said...

we are a car out of control driving towards to a brick wall! And the driver is surposed to be an 'expert'.

Thursday, August 17, 2006 09:34AM Report Comment
 

11. hard cheese said...

It seems as if this Blanchflower fellow could be one of Gordons Buddies? Either that or he is totally blind to the UK's current financial situation. Tis the blind leading the blind in to the unknown.

Thursday, August 17, 2006 01:38PM Report Comment
 

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