Interest rates

ad44downey

It's basic economics dannyboy. If you throw money around like confetti then inflation shoots up.

You should have been paying attention in school rather than chatting up chucky at the back of the class.

pickles110564

Dan: wrote: »

I can't see interest rates shooting up while we're in recession.

problem is I cant see no light at the end of the tunnel and me thinks that we aint even at the start of this recession yet.

Thrugelmir

Dan: wrote: »

I can't see interest rates shooting up while we're in recession.

Recession = Lower Tax Revenues

Government Financing = Issue of Gilts

Sell Gilts = Attractive Interest Rates to foreign investors.

Very basic but the predictament that the Government finds itself in.

Dan:_4

ad44downey wrote: »

It's basic economics dannyboy. If you throw money around like confetti then inflation shoots up.

I thought you would have it cracked.

I must say downey, your economic wisdom and logic is very valued on this forum. Keep 'Em coming.

GooeyBlob

Deflation is not really part of the equation, despite what politicians and bankers say. It's simply an excuse to justify dropping rates in a futile attempt to re-start the credit boom. The collapse in the housing market will continue to skew the RPIX figures for a while, but CPI will remain stubbornly high as the price of everyday goods increases. With the dramatic fall in the value of sterling, imported goods cost far more, so the pressure on prices is upward.

You may not notice it yet, other than in supermarket prices (I keep a very keen eye on these, and they've been going through the roof of late), but 12-18 months down the line you certainly will. The low rates are storing up trouble for the future.

Don't forget, the VAT cut is distorting the figures somewhat - and that is only a temporary measure, although I'd hazard a guess that they'll extend it until after the next election, whenever that is called.

Darth_Marty

ad44downey wrote: »

It's basic economics dannyboy. If you throw money around like confetti then inflation shoots up.

You should have been paying attention in school rather than chatting up chucky at the back of the class.

I think your far too speculative and what you deem to be basic economics I deem to be merely guesswork.

"Raging inflation will take hold within the next 3 years and interest rates will then shoot up to heady levels"

NOT GOING TO HAPPEN, NOT WITHIN 3 YEARS ANYWAY.

mewbie_2

Darth_Marty wrote: »

NOT GOING TO HAPPEN, NOT WITHIN 3 YEARS ANYWAY.

Well the pound has dropped in value by what 25% in a few short months. At some point that has to feed into inflation. Add in huge debt, bonds and other stuff I don't know much about - well inflation could be a lot higher quite soon.

Here's a really simplistic fools guide. While recession continues maybe inflation stays within some sort of control. Maybe. As soon as recession ends and recovery begins - maybe mid next year? - then the inflationery measures kick in big time. Plus extra taxation to pay back the money of course.

So a very short sigh of relief for those still working, and then a whole heap of pain.

I reckon I could do the Hamish Macrae stuff AND be right more often. It's all just guess work.

stevetodd

Dan: wrote: »

I thought you would have it cracked.

I must say downey, your economic wisdom and logic is very valued on this forum. Keep 'Em coming.

I have to say that this is oh so typical of the UK, all of our bloody experts are on forums, yet we have idiots like Andy Murray playing tennis (when the tennis forums are packed with much better players) same with the Darts we have that hopeless idiot Phil Power. Ok well sport isn't that important to some maybe but surely when it comes to the economy for example why oh why can't the experts on the forums come and save the country (as well as get a few more tennis and darts titles).

mewbie_2

stevetodd wrote: »

all of our bloody experts are on forums...

All of our idiots as well.

stevetodd

mewbie wrote: »

All of our idiots as well.

exactly (trouble is they think they are experts)