Wednesday, Nov 15, 2006

An interesting one for those that think Gordon controls the MPC

The Times: Has MPC decided it is time to act tough?

So the Bank of England sprang into action last week just as predicted, offering the nation a double high five an increase in interest rates to 5 per cent, their highest level for five years. What seems to have rattled the MPCs gilded cages is a disturbing mix of short-term worries and long-term trends. Taken together, these could signal the end of an extraordinarily benign and protracted period of low interest rates and cheap money. The increase brought to an end a 61-month run of official rates of less than 5 per cent. As Michael Saunders, of Citigroup, noted, this was the longest such stretch since 1956. This prolonged era of easy money was made possible and necessary by a series of shocks to the housing market correction of 2004-05, coupled with the favourable, disinflationary effects of globalisation.

Posted by scumbag @ 03:28 PM (415 views)
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1 Comment

1. paul said...

"This prolonged era of easy money was made possible and necessary by a series of shocks to the housing market correction of 2004-05"

Ha. You aint sen nothing yet.

Wednesday, November 15, 2006 05:18PM Report Comment
 

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