MSE News: Record inflation hike: could interest rates soon rise?

kennyboy66_2

What a wonderful opportunity to cut public spending by freezing all government pay deals and pension & benefits from April 2010.

Would have the added benefit of bringing inflation down without having to jack up interest rates.

Obviously we won't be doing this.

tomterm8

After saying I had only one thing to add, then adding another, I'm going to add a third. No one said I was short winded.

The other side of the thing is QT (quantatative tightning). My opinion is that the bank of england is actually reversing QE to an extent - at least as far as commercial loans (not gilts) are concerned - right at the moment. I've posted here a couple of times giving small examples, but keep an eye out on credit markets.

Generali

StevieJ wrote: »

I like your sig Gen, my favourite was

"I don't want to belong to any club that will accept people like me as a member."

He was brilliant. I saw a documentary on him a few weeks back. I never realised he ended up as a quiz show host for decades in the US and that's what the baby boomer age would know him for.

There are so many great lines:


Either he's dead or my watch has stopped.
I find television very educating. Every time somebody turns on the set, I go into the other room and read a book.
I have had a perfectly wonderful evening, but this wasn't it.
Alimony is like buying hay for a dead horse.
A hospital bed is a parked taxi with the meter running.
A child of five would understand this. Fetch a child of five.

Sir_Humphrey

Really2 wrote: »

Sorry I forecast a rate rise for last quarter now i think if inflation does not dip back under 2% we will see one first half of the year.

Still do not think we will be above 1% by the end of the year.

I did not mean to have a dig at you, sorry if I wrote my post in such a way to accidentally do so.

The point I was trying to make is that the idea of high inflation and high IRs are very different to what they were 20 years ago, or indeed even two years ago.

I am also making the point that IR rises need not be as high now as in the 1990s to cause a contraction in the economy, due to the very high level of personal debt and property leverage, which has still not worked out of the system.

Really2 wrote: »

As for the last bit who as said that?

Not you. I was not addressing you directly at that point. But a lot of property VIs are spinning that 0.5% rates are the new normal, which could be disastrous for anyone taking out a new tracker mortgage today if they are foolish enough to not consume such spin without a truckload of gritting salt.

Really2

Sir_Humphrey wrote: »

I did not mean to have a dig at you, sorry if I wrote my post in such a way to accidentally do so.

The point I was trying to make is that the idea of high inflation and high IRs are very different to what they were 20 years ago. I am also making the point that IR rises need not be as high now as in the 1990s to cause a contraction in the economy, due to the very high level of personal debt and property leverage, which has still not worked out of the system.



Not you. I was not addressing you directly at that point. But a lot of property VIs are spinning that 0.5% rates are the new normal, which could be disastrous for anyone taking out a new tracker mortgage today if they are foolish enough to not consume such spin without a truckload of gritting salt.

Sorry, I will now hold the right end of the stick.

Really2

Bit of proper news for once and we are all over it like rabid dogs.:D

DaddyBear

HAMISH_MCTAVISH wrote: »

I'd love to know the answer as well, particularly as the BoE have already explicitly stated they will not be targeting inflation until it's too late.

Fixed for you Hamish