Wednesday, September 15, 2010

Inflation has been above the central bank’s two percent target since December 2009

Bank's Miles says high inflation is a worry

"From my point of view on the MPC , I am particularly concerned about inflationary pressures, since it is our job to keep the rate close to the 2 percent target and it is uncomfortably above that at present."," Miles said, in quotes published in the East Anglian Daily Times.

Posted by mark @ 09:24 AM (2012 views)
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20 thoughts on “Inflation has been above the central bank’s two percent target since December 2009

  • wonder what his voting record is and why the other members of the MPC don’t seem to understand their remit.

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  • Come on Merv, do you have the tools in this wonderful monsterous Global economy which has been shoved down our throats.

    Let’s see you try, and try, and try. Oh deer in the headlights.

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  • sibley's b'stard child says:

    Perhaps he’ll fall in line with Sentance?

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  • Phew. Good job the MPC doesn’t meet for another month otherwise he’d actually have to put his MPC vote where his mouth is today.

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  • I guess you guy’s will be interested (and less than impressed with) this

    Governor of Bank of England will be ‘too big to fail’

    The office of the Governor of the Bank of England will be “too big to fail” once the current regulatory changes come into play, according to Lord Myners. The Government is proposing to break up the Financial Services Authority and replace it with the Consumer Protection and Markets Authority and the Prudential Regulatory Authority. The PRA will come under the control of the Bank of England.

    Speaking to the Treasury select committee yesterday, Myners said: “We have now reached a situation where we talk about banks being too big to fail. The Governor will now be too important to fail.

    “He will be the principle person in the court, he will chair the Financial Policy Committee, he will chair the Monetary Policy Committee, he will chair the PRA and he will represent the UK on the European Systemic Risk Board. So we are putting a considerable amount of expectation on the holder of the office of the Governor of the Bank of England.”

    Myners added: “The bank, through the PRA, will now have responsibility for banking, for the insurance industry, for investment management, for hedge funds and for a number of other activities.”

    He says there are a number of major resourcing and competency challenges for the bank and the PRA to meet these demands.

    Myners said he is concerned there is too much focus on the structure and management of the new regulatory bodies and not enough focus on the actual job at hand.

    He said: “The major issue I have with this document is it is about architecture and my view is that the answer to effective regulation is about behaviour and about competencies. It matters less about where you sit, than what you do when you are sitting there. And this document is relatively light on those areas.”

    SOURCE http://www.moneymarketing.co.uk/news/governor-of-bank-of-england-will-be-too-big-to-fail/1018443.article

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  • Halfway through the month someone from the MPC always spouts off about inflation and the MPC obligations.

    About 2 weeks later this sentiment vapourises and we stay with low interest rates. I’m no conspitaloon but a pattern of behaviour has emerged which seems to be based on deceit and manipulation.

    Are we being taken for suckers?

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  • 5. alan said…”I’m no conspitaloon”

    Well that’s you shortcoming. The whole of mans history has been based on conspiracies.

    Here’s a tiny quizz for you. How did cars a half mile away from the twin towers and tower 7 become burnt and mangled.

    Conspira-loon-ism is just common sense alan, but ignore the government backed nutty shills who lead people to dead ends.

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  • alan said…Are we being taken for suckers?

    Yes!

    Inflation will only get worse obviously, with climate change, flooding in pakistan etc peak oil…But no worries just print more money & pay us higher wages…Simples!

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  • My daughter and I went through the McDonald’s take-out window and I gave them a £5 note. Our total was £4.20, so I also handed her a twenty pence piece .
    She said, ‘you gave me too much money.’
    I said,’Yes I know, but this way you can just give me £1 back.’
    She sighed and went to get the manager “Mervyn King” who asked me to repeat my request. I did so, and he handed me back the 20 pence and said ‘We’re sorry but they could not do that kind of thing.’
    The clerk then proceeded to give me back 80 pence in change

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  • I think we’re going to be lumbered with low interest rates/high inflation for some time to come – given the impending threat of austerity measures. Would love to be proved wrong and see rates return to normal though… but I think there’s too much money to be made from commodities for that to happen right now. Heck, what do I know!

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  • tyrellcorporation says:

    I’m probably buying a house in the next 2 weeks and a large chunk of my reasoning for this is that I can see them ignoring inflation for years. The purchasing power of my savings is evapourating at an alarming rate and IMO the true inflation rate is closer to 10%.

    Some on this forum will see my actions as the ultimate contrarian indicator (to stay away from the housing market) but I have spent enough on rent now £50k in 5 years and houses in Exeter have advanced about 30% in that time (a further £100k loss).

    I’m big enough to admit I ballsed-up and totally mis-read the signs that the last government would literally do anything to support home-owners – and this included plundering savers to bail out speculators.

    Another reason for buying is that over the next 2 years I will pay £25k in rent. Any potential falls in house prices (which I believe there will be) in the area I am looking to buy will probably roughly match the figure coughed up in rent. If I’m lucky I can pay off the smallish mortgage (about £75k) in about 3 years as some of the current crop of mortgages allow unlimited pay-downs and the interest is calculated daily. My monthly hoyusing cost will go from £1000 to about £320 and I consider myself lucky as similar houses for rent near me are on for £1300 a month.

    Finally, I’m fed up paying someone else’s mortgage and financing their great lifestyle. Prices in Exeter have leapt by 15% in the last 6 months alone and my wife isn’t having it anymore – and quite franky I’m throwing in the towel too.

    I’ll keep checking the site guys and I feel you will probably be rewarded in the end but I’ve been doing this for 5 years now and I see just a possible slow erosion of house prices and high (and ignored) inflation.

    Life’s too short…sorry folks!

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  • I’m probably buying a house in the next 2 weeks and a large chunk of my reasoning for this is that I can see them ignoring inflation for years. The purchasing power of my savings is evapourating at an alarming rate and IMO the true inflation rate is closer to 10%.

    Although, I think this is exactly what BOE wants – i.e. support the bubble by getting people to spend, rather than save – I wish you the very best of luck!

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  • tyrellcorporation – thanks for your honest and open input – I wish you the best of luck – always good to hear your views on what’s going on in the South West.

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  • tyrellcorporation says:

    Thanks guys.

    @ hpwatcher. I agree this IS exactly what they want to happen but I am powerless as they hold all the cards and pull all the levers. I can rage against the machine all I like but I feel they’ve painted me into a corner – they’ve won and I have to accept that fact and move on. Savers have and will, for the forseeable future be impailed by negative real returns on their cash and a reduction of their purchasing power.

    I might well lose out if prices do correct properly but I have come to an impasse and I have decided to just bloody buy a place. I feel pretty sick about it but that’s life.

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  • ontheotherhand says:

    tyrellcorporation – good luck with the purchase and do let us know how it goes. Make sure you don’t cheat yourself on the sums to suit your conclusion though.

    “Another reason for buying is that over the next 2 years I will pay £25k in rent”, but how much is maintenance on average?
    “My monthly hoyusing cost will go from £1000 to about £320”, but then I guess you are putting about £250,000 of your own cash in, and forgoing any return on that money invested in something else much more liquid?
    So taking the above two points together, your comparitive overpay in rent is £1000-320-(250,000’s yield)-maintenance = £250 per month real difference? If so 2 years’ of real difference is £6k

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  • 9. tyrellcorporation said…”Life’s too short…sorry folks!”

    Why sorry?

    I have said before. “How much is peace of mind worth.” That works on both sides.

    You will personally and finally after consideration be buying that peace of mind, which is priceless.

    All the best with moving forward tyrell.

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  • tyrellcorporation says:

    Thanks ontheotherhand. I know I stated the ‘headline’ costs and that looks far more rosy but on balance the area of Exeter I’m looking at seems almost impervious to price drops as it has a very good school at it’s centre and is therefore a pre-eminent target for Londoners moving to breed in the SW. There is a limited stock of housing in the catchment area and prices are going ballistic. It’s probably a unique set of circumstances driving prices in this area so we have (IMO) to get stuck in now or we will be priced out.

    Coupled with the other factors I’ve mentioned, we’ve decided to buy into the Ponzi.

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  • “I am particularly concerned about inflationary pressures”

    Well you and your mates on the MPC should stop stoking them up then.

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  • good luck TC, one of my mates lives in Exeter way (bradninch) and says similar things about houses. He bought a place about 10 years ago and it has rocketed in ‘value’ , he has no intention of moving and says it’s bonkers; there is no way he could afford to live there now if he was a FTB.

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