The B.O.E decision Tommorow ..

Dan:_4

fatpig wrote: »

Already got one buddy. This country has had enough of the muppets calling for lower interest rates, they're to blame for this entire crisis

Whatever...

rae1202

i thought the remit for the BOE was to control inflation or has gord and co changed the goalposts on this too

Dan:_4

lrr wrote: »

Dont matter what happens tommorrow although I live in hope. Last time we got a rate cute my mortgage provider never passed it on! Hopefully the next cut they will pass it on. After all its meant to be in line with interest rates. Seems to count for nothing nowadays!

I very much doubt a full 0.25% cut would be passed on to borrowers.

Generali

rae1202 wrote: »

i thought the remit for the BOE was to control inflation or has gord and co changed the goalposts on this too

The remit of the Monetary Policy Committee of the Bank of England (MPC) "....is to deliver price stability – low inflation – and, subject to that, to support the Government’s economic objectives including those for growth and employment.". That has been the case since 1997.

The Bank of England as a whole is lender of last resort, issues banknotes, provides banking services to banks and manages the national foreign currency and gold reserves. Oh and it has a pretty interesting museum that is free (I think) where you can pick up a bar of gold which is quite cool.

Banderman

Raise interest rates. Pity they didn't raise them years ago and we might have avoided the chronic debt problem we now face

neverdespairgirl

I think they will hold them, with perhaps a 3 way split in the voting as last time.

mr_magoo_5

No doubt they will leave them on hold , only because too gutless to go up or down.
I see posts they don't want the blame for ruining the economy, well sorry, its ruined already!
So whats it matter, on hold ain't gonna save us either
Its only a game, so considering we don't hang people these days, chill out

Gorgeous_George

I think that they will hold and that Alastair Darling will bring the rate-setting role back into Government control by Christmas.

GG

Generali

Gorgeous_George wrote: »

I think that they will hold and that Alastair Darling will bring the rate-setting role back into Government control by Christmas.

GG

I agree they'll hold. The latter is politically impossible IMO.

martinman3

Generali wrote: »

So 2 things could happen:

1. Forgeign investors are right. The economy goes down. What happens when economic activity reduces? Prices fall = lower inflation. So inflation is higher due to the lower £ but lower due to the impact of recession.

Except that it used to work like that in the pre-globalisation days. Imported finished goods were either from Germany and cost more than the UK made equivalent or from the Far East (but not China in those days) and of inferior quality.
Now that nearly all of our finished goods come from China when £ falls and inflation rises there is no locally produced alternative so prices must rise as the importer will always sell goods at a price to maintain their profit margin. This is because the cost of the goods to them and the transport costs from China to UK will both rise.
Production of the few items which are still made here, such as cars, may continue but if the owner is foreign the profit they see will reduce when it is converted from £ into their own currency. This may mean that they close these factories and move production to the Euro zone.
Incidentally, as most energy companies are owned by foreign companies they will be inclined to maximise their profits as they will be in £ too.

There is some proper manufacturing still left in the UK but AFAIK it is engineering supplied to industry not for the consumer.

Not only do we now have globalisation but we in the UK have foreign ownership of UK companies, which other countries have not allowed, and this makes the future for the UK very bleak indeed.
I believe that you will see a future government re-nationalise the utilities when things get really bad.

Or a massive windfall tax which takes most of their profit, things must be really bad then !
http://www.thisismoney.co.uk/news/article.html?in_article_id=451530&in_page_id=2