Sunday, March 16, 2008

CPI holds at 2.3% confounding everyone – BoE lower rates by 100bps

UK tycoon Joe Lewis loses $800m on Wall Street

In Britain, nerves could be set on edge if the February inflation figures – also due out on Tuesday – show a decisive rise above 2.5%, from 2.2% in January. While Mervyn King, the Bank of England governor, has primed the markets to expect a significant rise in inflation in the coming months, any sign that it was moving higher at an unacceptable pace would be seen as limiting the Bank’s room for manoeuvre on interest rates. …………….anyone honestly believe Crash and Darling are going to allow the release of the true rate of inflation?????

Posted by bystander @ 01:47 AM (1385 views)
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18 thoughts on “CPI holds at 2.3% confounding everyone – BoE lower rates by 100bps

  • Like BOE interest rates, I think everybody will begin to see CPI as irrelevant.

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  • “Oh what a tangled web we weave, When first we practice to deceive”. Sir Walter Scott (Novelist, Poet, Historian and Biographer, 1771-1832)

    Like all famous purveyors of deceit they will eventually fall foul of it. Food and fuel inflation will nail them even if the value of the pound doesn’t fall much, its literally a Chicken and Egg situation (the first indicators on the supermarket shelves).

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  • happyrenterz says:

    I don’t think slashing interest rates by the BoE is a done deal. Their mandate does include keeping inflation in check.

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  • I agree happyrenterz, but whose inflation figures are they looking at????? True inflation or the massaged figures Crash and Darling take to bed.

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  • BoE to hold rates.

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  • Heaven forbid, they might even have to … raise rates …

    (no, silly idea)

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  • happyrenterz says:

    bystander, I am not an economist but I think inflation has the property that it leads to “runaway inflation”. That is, if you ignore it for a while it snowballs, gets exponential, because it infiltrates the whole supply chain. For this reason ignoring or fudging the numbers will be impossible long term as the runaway effect would expose the lie. So if interest rates end up in the teens in a few years time then we know Crash and Captain fudged the numbers.

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  • I say CPI will be 2.2% on tues. This will be blamed on the adverse weather conditions affecting the humble sprout and nothing at all to do with the price of oil trundling upwards on onwards towards the stratosphere.

    Brown and Darling and every other member of the Labore party will go into parrot mode, spouting, “Stability”, “low inflation”, “steady course”, “historically low interest rates”, at any opportunity. Typically they drop in these phrases at points that are completely out of context with the question that the interviewer originally asked.

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  • Isn’t the Office of National Statistics going to change the way they measure energy prices this month? Previously, the ONS would slowly change home energy prices after the power companies announce any increase or decrease in prices, believing that the energy companies would be slowly implementing price changes over several months. Now, as energy companies generally implement price changes with immediate effect, the change in CPI is also going to take right when the change in prices is announced. As power companies have announced multiple price increases over the past couple months, there should be a big bounce up in the CPI this month or next month, above what you would have seen in the past.

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  • Let’s just say – for the sake of argument – that Brown wants the UK to adopt the Euro (after all he was keen on us adopting the EU constitution, why not their currency?). How might that influence the BoE’s IR policy? Well, one thing is for sure – there is no way they would protect the £ by rising IRs. More likely would be moves to devalue the pound further, perhaps to the point of parity?

    Just a thought – no grand conspiracy intended on my part.

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  • harold, I think you might be onto something……Lisbon treaty signed without a UK referendum, Blair gunning for European President. This could indeed be the next big thing. Heaven forbid Crash would do anything so underhand to the British people. Devaluing everyones net worth with immediate effect. I would hope there would be an uprising and the Houses of Parliament torched, but by then we will be living under martial law with uniforms on every street to keep the unwashed under control (MOD encouraging all personnel to wear their uniforms in public). Didn’t Crash sell half the country’s gold and put it into foreign currencies a few years back – did he buy euro’s by any chance and would this mean he has infact created a ready made surplus, but one which can only come to pass if there is parity or worse negative exchange rate between Euro and GBP. If this became public knowledge there really would be panic of the streets of London, Birmingham and everywhere in the UK.

    Just a thought – no grand conspiracy intended on my part either.

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  • I suggested the idea of the UK being forced into joining the Euro because of inflationary pressures sometime ago. I don’t know jack but it seems fait accompli.

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  • planning4acrash says:

    Either way, I feel that the truth will come out rather soon. Maybe, just maybe, scandalous as it is, the MP’s John Lewis payments scandal has been let out now because it is distracting the population from something bigger, something nastier. It co-incided nicely with the death of the police leader and the release of statements about military wearing uniform on the street. Something ugly is happening. I expect a “terrorist attack” by MI5 within the next 1-3 months followed by something draconian. But I feel that too many people know already that we are being lied to. Enuii is spot on, I like that quote.

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  • planning4acrash says:

    If Mayan calender is right, things will continue to get ugly until Nov this year. Certainly, the Chinese Olympics could trigger something aweful, as seen in Tibet, but ultimately, something that could be truly liberating.

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  • happyrenterz says:

    terrorist attacks are over-rated. They don’t change society in any meaningful way in the long term. People get a bit more security conscious but if anything they become more determined to keep life going the way it was. Things change from within when people realise that the way things are is not sustainable.

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  • planning4acrash says:

    Not with interest rates they aren’t happyrenterz. Sept 11th was used to slash rates after the .com crash. No doubt a London or American attack would be used to slash rates either side of the pond. Particularly if it was engineered for that and other purposes by the authorities. Particularly if they are looking for a reason also to attack Iran alongside pumping up of the banks.

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  • planning4acrash says:

    Remember that old Bushey doesn’t have long to carry out his middle eastern ambitions, and they have nothing to do with peace and democracy. They have to do with corporate imperialism, and he will be bankrolled after his presidency. Remember that all he needs to do is one day of shock and awe and he commits the USA and others who follow to a decade or so of guirillia warfare.

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  • Sadly, it seems the weapons that governments use in times of crisis are, like their intellects, rather blunt. But when, like Bliar, you can ignore best advice of your ‘experts’ and the wishes of your public the bluntness of your weapon doesn’t really matter does it? Because you just carry on regardless and then just jump from one carriage to another on the same gravy train.

    The governments of the west (and specifically the USA and UK) are starring down the barrel of a gun now – and the gun is also pointed at all of their populations too. It’s going to take one hell of a smokescreen now to make the populations think of something other than the predicament we are in and who is responsible. But nevertheless the governments of the west are very good at finding boogey men and they’ve never needed one more than they do currently. Anyone care to hazard any guesses as to who it might be? What about Russia? How quickly could the Cold War be brought back to the boil?

    It seems to be an accepted point now that 9/11 had an enormous impact (no pun intended) on the US economy and fairly drastic measures were taken to ensure that the US did not slide into recession which would have been used by the terrorists as a ‘victory’. If a similar attack were to happen would this have the same effect or could be a knock-out blow for the US economy? I truly hope we never get to find out.

    All I can say from here on in is expect the unexpected.

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