Thursday, Aug 10, 2006

Inflation? What inflation?

Telegraph Online: Why shock tactics could backfire for 'Mr Boring'

Pap from Edmund Conway [Telegraph Online Business Economics] which suggests there is no need to increase the UK's interest rates because worsening global conditions will trim inflation for us without consumers and home owners taking a hit. Reasopns given are: anticipated decline of the US' economic conditions; the ECB's decision to raise rates will reduced European growth, higher Sterling will hurt exporters to our overseas markets; and the impact upon the consumer and home-owner. Seems dodgey to me.

Posted by talking rot @ 10:57 AM (472 views)
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1. harold said...

"Seems dodgey to me." TR

That's because it is dodgy. We had the same dubious logic spouted the week before the BoE raised rates to 4.75%. If there were any validity in this argument all central banks would sit on their hands waiting for someone else to do something about the fact that the world is awash with liquidity. I.e., cheap money stuffed into assets that have - surprise, surprise - created numerous bubbles and undermined confidence in fiat currencies. This in turn has led to people to dump the dollar and create yet more - yes, you've guessed it - bubbles, primarily in metals.

Desperate VI nonsense that the MPC will ignore, hopefully.

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

2. Thesqueeze said...

John Butler, UK economist at HSBC, said: "They can quite easily justify the decision by pointing to the data, but for some reason they didn't send the message out about what they were about to do."

Yes they did, last thursday, that's when they announce it Mr.Butler - didn't you know?

Maybe he was expecting a call beforehand? "Hey John, it's Merve here, thought I'd let you know we are going to raise the rates today, didn't want you to hear it through official channels like everyone else...."


Thursday, August 10, 2006 12:18PM Report Comment

3. inbreda said...


Thursday, August 10, 2006 03:30PM Report Comment

4. autopilotengage said...

I also found Squeeze's comment particularly amusing. Nearly gave the game away in work! Funny the part of the article where he says the bank of England have "defied" city economists.


Thursday, August 10, 2006 11:32PM Report Comment

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