predictions

Angel555

What are people's thoughts/predictions on BOE rate - up or down?

straddie

Ask 100 people and you'll get 100 different opinions as to how things are going to pan out! At the moment you've got inflation high on one hand, and the economy performing badly on the other. The first of these calls for rate rises, the second for rate cuts. The BOE are caught between a rock and a hard place! At the last rate meeting there was a three way split, so clearly they don't know what to do!

There are a few people now thinking that rates will stay stable for a while until inflation hopefully stabilises, and then we'll see some cuts to stave off recession. However, the minutes from the last BOE meeting did contain a strong hint that August might bring a rate rise:

http://www.bankofengland.co.uk/publications/minutes/mpc/pdf/2008/mpc0807.pdf

"Although it could do little to alter the path of inflation in the near term, the committee could, by raising Bank Rate this month [July], send a strong signal that it was focused on inflation and remained determined to bring it back to target in the medium term."

However...

"A rate change this month would be a surprise at a time when credit and other financial markets remained fragile, and any change in rates would be better communicated alongside the Bank’s August Inflation Report,"

You pays your money (pun intended), you takes your choice!

boinging_2

Given the latest GDP figures today I would suggest the bank will hold off raising rates...

Dan_Collins_2

Does not matter as a giant alians will wipe us out on Tuesday!

lisyloo

The national Institue of Economic and Social Research this rates need to rise.
http://uk.reuters.com/article/domesticNews/idUKL249167102008...

My best guess for 2008 is hold (risk of one rise)
The several cuts in 2009.

But that outllok changes constantly with events.

If you can afford to take the risk then I would go tracker.
If you can't afford 2% rises then go fixed for peace of mind.

Ther is really no way to predict accurately so go by your circumstances and attitude and don't try to second guess the economy.

Dan_Collins_2

I still go with the giant green men!

neverdespairgirl

At the last decision by the Bank of England, they voted three ways - most to hold, and one each to raise and lower. Even they don't know!

*MF*

Might depend very much on what happens with Gordon Brown - does he try to hang on by borrowing more and adjusting taxes downward - if they are about set to dispense with all the "Golden rules" etc - he may go for broke.

Why not ...we're more than halfway broke already.

If he does, the BofE will hold, and possibly raise later on a counter inflation argument - citing a looser fiscal policy as the spur to the economy - it's what the good old USA are doing - and it seems to be working - for now.

No matter what we'll all pay for it a few years down the road, mind you.

But don't ignore the little green men - Dan could be onto something - or did I mean "on" something

Dan_Collins_2

Please MF giant green men!

Well its as easy to predict!

IvanOpinion

straddie wrote: »

Ask 100 people and you'll get 100 different opinions as to how things are going to pan out!

Just to be pedantic .. would you not get 3 opinions .. up, down or stay the same

Ivan

natman

Hi..........
I cant really see how interest rates can rise.
The man reason the BOE rates rise to stop inflation is to stop people having more money to so spend......... This then leads onto companies having to reduce the prices on things thus bringing down inflation.......

We as a nation are generally spending like interest rates are high anyway, we are tightening our belts and not buying products. this is having a little effect on costs of goods, but the costs of goods cant come down too much due to the raw material costs - oil, gas etc etc
I think inflation( if it can) will come down naturally without rate cuts due to us not spending.

The biggets thing is recession and confidence. this can be managed a little better with interest rate cuts - Not a lot of peole are confident with house prices, employment............

Rates to stay the same - mainly coz they are scared of doing anything else.........