Wednesday, Sep 20, 2006

BOE: Bank voted 8-0 to hold UK Interst Rates Unchanged at 4.75%

BBC News - Business: Bank voted 8-0 to hold UK rates

You wouldn't 'Adam 'n' Eve It'!: The decision to hold UK rates at 4.75% earlier this month was backed by all eight members of the Bank of England's rate-setting body, minutes have shown.

Posted by nearly30 @ 07:55 PM (597 views)
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9 Comments

1. Northernlad said...

is this spin?

Wednesday, September 20, 2006 08:06PM Report Comment
 

2. nearly30 said...

Some extra info on this topic. Enjoy - but I didn't notice much said about house prices though - if anything!

Source: BOE Minutes of Monetary Policy Commitee Meeting 6 & 7 Sept 2006

"Given higher actual UK inflation data and news about further near-term energy price increases
and the possible effect of tuition fees, it was less surprising that inflation expectations had also
increased at shorter horizons, as shown both in surveys of the public and in data from the inflation
swap market. But the upwards movements in medium-term break-even inflation rates was both
puzzling and a possible concern."

Wednesday, September 20, 2006 08:08PM Report Comment
 

3. nearly30 said...

Sorry for the extra extra info but check out the BOEs own CPI predications/expectations:

From Aug 2005 = http://www.bankofengland.co.uk/publications/inflationreport/mktcpiaug05large.gif
From Aug 2006 = http://www.bankofengland.co.uk/publications/inflationreport/mktcpiaug06large.gif

Wednesday, September 20, 2006 08:15PM Report Comment
 

4. Surfgatinho said...

I've seen the BOE inflation predictions before. It's a bit worrying they seem to be reluctant to deal with impending inflation as they are under the impression it will ease longer term. What do they know we don't?

Wednesday, September 20, 2006 10:52PM Report Comment
 

5. uncle tom said...

The difference between those two fan graphs can mostly be put down to oil and gas prices.

They are taking the view that once the increase in energy costs has worked it's way through the system, inflation will settle back.

I take a different view, believing that the west's trade deficits will begin to 'autocorrect' - pushing up the prices of many imports, and removing the deflationary counterbalance that has offset the steady increase in service industry costs.

The Bank's fan graphs are supposed to show the range of possible outcomes after allowing for all the uncertainties in the data they use. They look very sober and convincing, but I personally believe there is quite a good chance of inflation ranging beyond the top limit of the fan.


Thursday, September 21, 2006 08:31AM Report Comment
 

6. george monsoon said...

Why the dip in this particular quarter of the year???

I used paintshop to reverse the image on the vertical and it looks more realistic, given that interest rates are more than likely going to rise in November ;O)

Thursday, September 21, 2006 11:23AM Report Comment
 

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