BoE MPC member says prices could drop to 2003 levels.

slipthru

adr0ck wrote: »

less people would lose their jobs

Ok is that what is happening in America now and what happened in Japan.

I'm more for helping everyone rather than a few.


Keeping inflation in cheek benefits everyone.

adr0ck

slipthru wrote: »

I'm more for helping everyone rather than a few.

.

fine you agree with me then that we are heading into recession and therefore interest rates will need to be cut in the near future (probably by the end of year / beginning of next year)

stonethrower

adr0ck wrote: »

fine you agree with me then that we are heading into recession and therefore interest rates will need to be cut in the near future (probably by the end of year / beginning of next year)

Either way I think we are heading for a recession but its better to get inflation under control first, we don't want stagflation.

slipthru

adr0ck wrote: »

fine you agree with me then that we are heading into recession and therefore interest rates will need to be cut in the near future (probably by the end of year / beginning of next year)

Yes i agree we are heading for recession, what i am trying to understand is how inflation getting out of control will help everyone in the long run, surely for that to work we will all need inflation pay rises? But i am not seeing that happen at the moment. Unless of course there is some thing that i am missing.

ultra10

slipthru wrote: »

Yes i agree we are heading for recession, what i am trying to understand is how inflation getting out of control will help everyone in the long run, surely for that to work we will all need inflation pay rises? But i am not seeing that happen at the moment. Unless of course there is some thing that i am missing.

It wont ..but the average joe cannot see that ... They think Reducing rates is the easy pill to swallow not realising its severe side effects ... Rates should stay where they are... & once inflation begins to fall back, maybee.... only maybee...a reduction ..

adr0ck

ultra10 wrote: »

It wont ..but the average joe cannot see that ... They think Reducing rates is the easy pill to swallow not realising its severe side effects ... Rates should stay where they are... & once inflation begins to fall back, maybee.... only maybee...a reduction ..

rates should stay where they are for now

with a reduction at the end of the year beginning of next year (possibly to 4% - over the year) IMO

mystic_trev

LONDON (Thomson Financial) - Optimism in the UK manufacturing sector in June sank to its lowest level since the aftermath of the Sept. 11, 2001, terrorist attacks, while price pressures soared to an 18-year high.

In its monthly industrial trends survey the Confederation of British Industry said its monthly order book balance fell to -8 percent from +1 percent in May, missing analyst expectations for a reading of -5.


However, there was worse news on the inflation front,
with the balance of firms expecting to raise domestic prices in the coming three months soaring to +34 percent from last month's +28. It is the highest reading since January 1990 and will reinforce expectations UK interest rates are unlikely to fall anytime soon.


In its quarterly questions, the CBI found sentiment among UK manufacturers has fallen sharply, with the balance of firms optimistic for the coming three months diving to -40 percent from -23 percent in April. It is the lowest level recorded since October 2001 and is well below analyst expectations for a reading of -28 percent.

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=ade34faf-6447-41d0-938b-76d86beff39c

We're heading for the mother of all recessions and I 'aint gloating

WTF?_2

mystic_trev wrote: »

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=ade34faf-6447-41d0-938b-76d86beff39c

We're heading for the mother of all recessions and I 'aint gloating

Yep - lower interest rates or not it's clear that the economy is going to tank hard.

Rates are already extemely low for the level of inflation. Lowering them further just pumps up the risk of stagflation with bubbles sure to form as a result of the big boys punting speculative money on various commodities.

Of course, lower rates will be popular with the over-indebted section of the population so there will be pressure to lower them with the election coming within the next 2 years. Another example of Gordon's poor judgement - he could have called an election 12 months ago and got back in comfortably as the general public/media at the time seemed to think that we were set fair. :rolleyes:

Anyone contemplating taking on a large amount of debt (including mortgage) at this time would have to be plain bonkers, unless they believe that we are in for a period of heavy wage inflation to match general price increases and that the govt will be forced to lower interest rates no matter what the dangers.....

BTLNEWbie_3

!!!!!!? wrote: »

unless they believe that we are in for a period of heavy wage inflation to match general price increases and that the govt will be forced to lower interest rates no matter what the dangers.....

Interest rates need to be put up by at least 2% now, then no one would be able to pay out large wage increases.
Lets go for a hard quick lesson and get it over with now.

kennyboy66_2

dougs wrote: »

I've always wondered why on earth there is an American on this British committee anyway. :rolleyes:

Erm...... he's British