Wednesday, October 21, 2009

There’s life in the old dog yet

Pound soars on Bank meeting notes

The pound has rallied after the Bank of England said its monetary policy committee voted 9-0 earlier this month not to pump more cash into the economy. The pound was up 1.8% against the dollar and up 1.1% against the euro, after the minutes of October's MPC meeting revealed the bank voted unanimously not to extend its £175bn programme of quantitative easing, and to keep interest rates on hold at 0.5%.

Posted by little professor @ 05:42 PM (1918 views)
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17 thoughts on “There’s life in the old dog yet

  • c'mon correction says:

    It’s surged on the oil price today, not because a bunch of dove’s decided not to hose-pipe yet more money on the charred husk that is the UK economy!!

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  • Wasn’t the general consensus on here that more QE was inevitable, or did we maybe all get a bit hysterical?

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  • Well hang on a minute.

    It’s achieved its primary objectives – to get house prices rising and get bankers back in the money. This decision is not to abandon QE, but just to give it a temporary hiatus.

    When the double dip starts, watch the MPC roll out more QE quicker than you can say “central bank induced moral hazard”.

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  • 3. paul

    Exactly.

    A leopard does not change its spots.

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  • c’mon correction,

    I wonder why the rising oil price boosts the pound. North sea oil is an irrelevance – we’ve been net importers for some years now.

    Call me cynical, but does the rising oil price mean more Russian oligarchs and Saudi sheiks snapping up multi-million pound mansions in Mayfair?

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  • impressive move actually. I thought it would be going up but not that much and that quickly- well not against the US anyway! And it wasn’t even oversold.

    Oh well looks like the drawing board has to be revisited…… maybe.

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  • mountain goat says:

    Dollar’s kept falling after our close, Dollar Index been down to 74.95 !

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  • ”soars”

    This word is so over used……pathetic

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  • 9. hpwatcher said…
    “”soars”

    This word is so over used……pathetic”

    Lol. Add to that ‘spiralling out of control’

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  • The pound rises in a week of trading and everyone gets excited. lol

    One needs only to look at a weekly chart. “Pound soars” Give me a break!

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  • Maybe it’s a typo which should have said: Pound’s sore after heavy fall. Or something like that

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  • Wasn’t it openly stated by the MPC that they would revisit the QE question in the November meeting, so surely this ‘decision’ was a foregone conclusion? Wait till next month and then listen to all the ‘analysts’ open up the parity can of worms again.

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  • Double Dipper says:

    I think Merv was trying to talk up interest rates today. It’s an old trick from the BoE / politicians to reveal future plans as an alternative to actually carrying them out. Given that the markets are generally wise to this, I reckon it was directed at the housing market punters. After all, businesses are hardly borrowing recklessly 😉

    @6 – North sea oil is an irrelevance – we’ve been net importers for some years now.

    We’re still net importers, but we import less than most places, so an oil price rise will still help our currency relative to others.

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  • For interest rates to stay low in order to save inflated wealth the pound must be stronger than this. Weak pound will mean higher prices next year and we all know that high interest rates will mean game over for house prices.

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  • 14. mander

    Are you implying that our leaders can be competent when they want to be?

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  • It isn’t “soaring”. It needs to get back to the £/€ level of £1=1.25€ or above for it to “soar”.
    Hobbling along the bottom with a broken wing might be more apt at the moment………………..

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