Thursday, Dec 10, 2009

No change to Base rate or QE programme

BBC: UK interest rate remains at 0.5%

The Bank of England has held UK interest rates at the record low of 0.5% in a widely-expected move. It also announced no changes to its programme of pumping newly-created money into the economy - so-called quantitative easing (QE).

Posted by jack c @ 12:12 PM (2259 views)
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1. mrflibble said...

No surprises here, these geniuses cut the base rate too late in the game and then by too much, so you can bet your bottom Dollar they will wait too long before raising it again and then push it up too high.

The housing bubble they are stoking back up with zombie base rates and QE doesn't seem to compute over at the BoE.

Thursday, December 10, 2009 12:31PM Report Comment

2. quiet guy said...

With current worries about debt defaults by Dubai, Turkey and Eastern Europe, the BoE will not want to do anything to draw attention to itself hence no news is the best course.

This reminds me of a naughty schoolboy sitting at the back of the class, hoping to avoid teacher's attention.

Thursday, December 10, 2009 12:54PM Report Comment

3. paul said...

Hang on. Rising house price inflation but interest rates held at record low levels? Isn't this what created our current problems in the first place?!

Thursday, December 10, 2009 01:00PM Report Comment

4. timmy t said...

I remember the goold old days when we used to look forward to these announcements... They are barely noticed now, which is a sign of just how much s h i t we are in!

Thursday, December 10, 2009 01:12PM Report Comment

5. crunchy said...

3. paul

The £ hovering around main support? Are they relying on the yen to bail them out? House price inflation the answer to all problems?

Thursday, December 10, 2009 01:25PM Report Comment

6. Alfie said...

After the next election is when it will all go pear shaped, but by then if Labour get in again they wont care because they will have another 4 years and Brown will be all smug as this time he will have been voted in by the god can nightmares really happen.

Thursday, December 10, 2009 02:07PM Report Comment

7. matt_the_hat said...

If they don't extend qe who is going to buy the tidal wave of national debt that is coming, without a promise that the government will buy it back with a nice margin.

Thursday, December 10, 2009 02:09PM Report Comment

8. mark wadsworth said...

"no changes to its programme of pumping newly-created money into the economy - so-called quantitative easing (QE)." ??

Nope. That money is just going in a closed loop between banks and the Bank of England, in theory and in practice it has no effect on anything. Even if you went one further and gave the banks new money, it would still have little effect on anything - you must remember the Golden Rule - bank reserves do not create loans. It's the other way round - loans create deposits.

Had they really want to "pump money into the economy" they would have done far better to liberalise planning laws and have biggish tax cuts on productive activity - £130 billion would have gone a long way!! Maybe even hike taxes on land and property values (such taxes do not dampen productive activity). But this would have only benefitted the productive economy and not helped prop up the house price bubble, would it?

Thursday, December 10, 2009 05:01PM Report Comment

9. 51ck-6-51x said...

MW - Indeed. Chortle.

Thursday, December 10, 2009 05:22PM Report Comment

10. the number cruncher said...

The wise words of Mr Wadsworth gives me hope - but I have little faith in Government and a no charity for the banks.

Thursday, December 10, 2009 09:22PM Report Comment

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