BOE Bean: Will Keep Rates Low For As Short A Time As Possible

inspector_monkfish

19:13 20Jul09 - BOE Bean: Will Keep Rates Low For As Short A Time As Possible

LONDON--Bank of England Deputy Governor for Monetary Policy Charlie Bean said Monday the central bank is aiming to keep its benchmark interest rate at its current ultra-low level for as short a period as possible.

Speaking to BBC Radio Bristol during a national tour to explain the Bank's policy of quantitative easing, through which it is buying GBP125 billion of securities with freshly created central bank money, Bean wouldn't give any indication of how soon rates were likely to start rising.

He reiterated that the downturn in the U.K. economy appeared to have "bottomed" out, but said that businesses generally remained "cautious," as they were waiting to see how conditions develop.

"We're trying to ensure that this is as short-a-lived period of unusually low interest rates as we can make it," Bean said, in response to a question on the plight of savers who are receiving little income on their investments due to the extremely loose nature of monetary policy.

He added that the Bank would reduce monetary stimulus and raise rates back to a more normal level as the economy recovered.

Many economists expect interest rates, which have stood at 0.5% since March, to stay at that level until well into next year.

ruggedtoast

Bean!


.....

HousingBear

Sounds like we're being readied for an increase in interest rates, after which the BOE will say "well, we did try to keep interest rates low for as long as possible".

I don't see this as any sort of committment for a long period of low interest rates. Rather the reverse.

inspector_monkfish

HousingBear wrote: »

Sounds like we're being readied for an increase in interest rates, after which the BOE will say "well, we did try to keep interest rates low for as long as possible".

I don't see this as any sort of committment for a long period of low interest rates. Rather the reverse.

he deduced all that from Bean's throwaway comment?
bly me.:D

ruggedtoast

Its going to be chaos when rates go up. Can you imagine the Mail

"Brown Banishes Hopes of Housing Market Recovery"

And the Express

"Rates Rampage Leads to More Maddie Sightings"

Thrugelmir

HousingBear wrote: »

Sounds like we're being readied for an increase in interest rates, after which the BOE will say "well, we did try to keep interest rates low for as long as possible".

I don't see this as any sort of committment for a long period of low interest rates. Rather the reverse.

Agree. We seem to be sleepwalking into a 0.5% base rate being the norm for ever and ever.

When rates start to rise. Those with tracker rate mortgages and loans will start to feel the squeeze. (myself included). At the moment making hay while the sun shines and clearing down capital as fast as I can.

The increase could come very suddenly.

Thrugelmir

inspector_monkfish wrote: »

he deduced all that from Bean's throwaway comment?
bly me.:D

Merv's made similar comments recently.

Poolie

I think the rates will rise but will not be this month especially with the Debt figure out this morning.

May see a rise in August but more than likely September depending on how the housing market and inflation numbers are looking. If it does rise it will be slow and steady so expect 0.25% rises over a long period.

Dan:_4

Who here would be happy to see rates rise?

Poolie

There is nothing we can do about rate rises. Everybody knows that the current 0.5% interest rate is not sustainable for a long period (I am talking years).

Thrugelmir

Dan: wrote: »

Who here would be happy to see rates rise?

Anybody who is debt free.