The B.O.E decision Tommorow ..

WTF?_2

They're obviously hoping that inflation will just 'burn itself out' as the economy slows down.

Of course by the time it subsides, we'll have seen prices increase by a substantial amount and unless it goes negative, essential things won't be getting any cheaper....

Chris2685

Oh well, looks like those 'SHOCK AT RATE RISE' and 'SHOCK AT RATE CUT' headlines will have to be thrown out and the 'BOE STAGNATES AGAIN' will have to stay in...

pizzagirl

ad44downey wrote: »

The MPC should be sacked. They aren't doing their job.

They aren't on performance-related pay. That's for sure.

martinman3

ad44downey wrote: »

A missed opportunity to arrest the plunge in the value of the pound and the evil of soaring inflation.

A chap from Barclays Capital speaking on BBC News this morning said that the market had already priced in a rate cut and so if rates were held that the pound would rise.

We shall see.

WTF?_2

martinman3 wrote: »

A chap from Barclays Capital speaking on BBC News this morning said that the market had already priced in a rate cut and so if rates were held that the pound would rise.

We shall see.

Hmmm, AFAIK just about everyone was predicting a hold. Though maybe there's an element of risk factoring involved.

I wonder would we have had a cut if the pound hadn't just collapsed so dramatically?

martinman3

!!!!!!? wrote: »

Hmmm, AFAIK just about everyone was predicting a hold. Though maybe there's an element of risk factoring involved.

I wonder would we have had a cut if the pound hadn't just collapsed so dramatically?

It is very worrying that the government and BOE seem to have lost control of the economy.

Rates of borrowing are set by the banks from LIBOR not base rate.
Value of pound set by FOREX traders regardless of base rate.

WTF?_2

martinman3 wrote: »

It is very worrying that the government and BOE seem to have lost control of the economy.

Rates of borrowing are set by the banks from LIBOR not base rate.
Value of pound set by FOREX traders regardless of base rate.

The problem is that the government and BoE have painted themselves into a corner and have no room for manoeuvre.

During the boom times (most of the last decade) you are supposed to cut government spending and run relatively high interest rates to curb inflation ... after all there are plenty of private sector jobs and money and the strong economy can support higher borrowing rates.

Then, when the bad times come you can afford to increase government spending (from all the revenue you earned and savings you made in the good years) and cut interest rates (they will be relatively high, so scope to cut).


This incompetent lot have spent (and borrowed!) like Billy-O during the good times (when it wasn't necessary) and ran all-time low interest rates (when it wasn't necessary) at the same time, resulting in a mega-boom. Now the bad times are upon us and the government are overborrowed and the BoE are having to deal with an inflationary hangover from the too-low rates of the past.

They are really between the Devil and the Deep Blue Sea.

Chris2685

Interesting you should say that !!!!!!. I am not agreeing or disagreeing, but just stating what I have read in the news... It seemed to me over the past few years people were constantly moaning about being taxed more than ever through stealth taxes, etc... Surely these taxes made up for some of those losses?

WTF?_2

Chris2685 wrote: »

Interesting you should say that !!!!!!. I am not agreeing or disagreeing, but just stating what I have read in the news... It seemed to me over the past few years people were constantly moaning about being taxed more than ever through stealth taxes, etc... Surely these taxes made up for some of those losses?

Two words: 'Tax' and 'Spend'.

The government were getting record tax receipts but were also spending huge amounts of money, requiring massive amounts of borrowing at the same time. Madness.

They also did an Enron-style bit of 'off the books' trickery and engaged a lot of private companies in PFI schemes to do stuff which otherwise would have been 100% government funded, which are not costed.

These PFI commitments will be costing taxpayers tens of billions of quid in coming years.

What a shower. At least Gordon is still around to carry the can, what a shame Tony Bliar was slimy enough to get out when the going was good.

ruggedtoast

I cant believe the number of people who seem to think that an interest rate cut will bring inflation down. GMTV were saying that this morning, I almost fell off my chair.