Thursday, June 16, 2011
He means lean years for YOU, not HIM
We're only halfway through seven lean years, warns Governor of the Bank of England
"In a stern lecture at London’s Mansion House, he warned that the failures during ‘seven years of plenty’ before 2007 would threaten the economy until 2014". "But to the relief of consumers, he made clear that he is in no hurry to raise interest rates from the present 0.5 per cent to combat rampant inflation". (but Ed Balls wants a VAT cut).
Posted by alan @ 12:20 PM (3319 views)
19 thoughts on “He means lean years for YOU, not HIM”
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stuartking says:
“Sir Mervyn said that so far the rise in prices for consumers and businesses was largely a result of global factors such as soaring oil and commodity prices, and this had not fed through to wages and domestically generated inflation.”
Nothing to do with exceptionally low interest rates devaluing sterling then… which continues to fall, even against the Greek-debt hampered euro… http://uk.reuters.com/article/2011/06/16/markets-sterling-idUKL6E7HG03C20110616
Newboy says:
“But to the relief of CONSUMERS, he made clear that he is in no hurry to raise interest rates from the present 0.5 per cent to combat rampant inflation”.
I’m new here so please forgive me if I sound niave, but how exactly is rampant inflation beneficial to the consumer??
timmy t says:
‘We could have raised bank rates significantly so that inflation today would have been closer to the target,’ Sir Mervyn said.
So how does that square with the BoE’s remit?
richy richless says:
Whats the going rate for after-dinner speakers with knighthoods these days?!
brickormortis says:
When you’re not earning in Sterling this is always good news. Looks like the markets might just stop thinking that a rate rise will come. Will this be the catalyst for a breach of 1.60 against the dollar?
hpwatcher says:
Why would anyone want to listen to king? He was the one asleep at the wheel – no one else.
wiltshire says:
Well I’m doing my bit. Apart from necessities I just don’t buy anything anymore.
They have corrupted capitalism so much that not shopping is now an act of revolution!
Crunchy says:
5. hpwatcher said…Why would anyone want to listen to king? He was the one asleep at the wheel – no one else.
~ I listen to him all the time, intently and the message is very clear. Thanks Merv the Nerv for twisting my melons.
financial planner says:
Cecil Parkinson – The Politics Show yesterday – Capitalists are destroying capitalism. Indeed Sirrah
Crunchy says:
Crony capitalism is destroying capitalism.
It’s called fascism. Engineered boom and bust? Yes please.
wiltshire says:
Did anyone catch Nassim Nicholas Taleb on Newsnight last night talking about black swan events? Toward the end of the interview he said he thought the fact that people in the West haven’t been rioting over the banking bail outs is a black swan event in itself.
Something will give.
Possibly.
stuartking says:
@8: Too true… One thing Mervyn King did get right, in a quote to the Commons treasury committee, March 1: “The price of this financial crisis is being borne by people who absolutely did not cause it,” he said. “Now is the period when the cost is being paid, I’m surprised that the degree of public anger has not been greater than it has.”
Perhaps we shouldn’t be so surprised though, the majority are more concerned about who’ll win Britian’s Got Talent or X Factor…zzzzzzz
jack c says:
stuartking (Thursday, June 16, 2011 04:04PM) – youngsters with debt watch Britian’s Got Talent/X Factor whilst shafted savers with cash on deposit watch Strictly. Dancin on ice also provides a cool distraction.
Ccamper says:
Meanwhile Fred Goodwin THE BANKER is 3.5 years into his £60K per month pension.
We’re all in it together!
mark wadsworth says:
Ed Balls is (unusually) right for once – VAT is the most damaging tax of all, if we can’t get rid of it then let’s reduce it to the lowest rate the EU will allow, which is 15%.
Poopredictions says:
vat changes in 17.5%+/- 3 are not spending inhibitors as one has already decided on the NEED to spend within ones budget. Main concern is china’s desire to accumulate export derived cash to grow its economy,and not devaluing its currency is part of strategy.It feels justified.It will obviously soon lead to a global readjustment of wealth with the west on back foot from now on.Its thirst for commodities is clearly strategic with internal growth in mind but like the japanese since 1960s have low consumer appetite.
peter says:
@ MW
Even better, reduce it to say 5%, break the EU rules and have them expel us!
nickb says:
Interesting that Merv sought to reassure people on interest rates. This could be seen as muscle flexing. If the BoE raises interest rates, it will tip a significant proportion of mortgage holders over the edge and cause government popularity to plummet. So the government has to keep the banking sector sweet. Or else. In just this way the debate can be restricted to one about rearranging the deckchairs, “excesses” of the boom years, tweaking the regulatory system, and so on, without any fundamental reform to prevent the same crises reoccuring.
N
alan_540 says:
So rather than a quick but painful correction (“high unemployment is a price worth paying…” and all that) we’re halfway (yeah right!) through a period of high inflation and wage stagnation. I expect that Merv’s saying 7 years but really it will be more like double that. Hope not, but we’ll see…