OECD warns UK rates may have to go up

mystic_trev

the bank of england may have to start hiking rates sooner than other central banks because of inflationary warnings signs, according to the organisation for economic co-operation and development.

Read more: http://www.thisismoney.co.uk/news/article.html?in_article_id=502505&in_page_id=2&ct=5#ixzz0kuu5heyd

Really2

mystic_trev wrote: »

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As far as I can tell The BOE have been fairly spot on.


But they may put it up a tiny bit if we do grow quickly, but inflation is not that high really.

Cant see it going any where near 5% for years TBH.

Graham_Devon

I could be spot on with a spread like that!

treliac

But it won't be until after the election of course. People can carry on believing they are entitled to cheap mortgages for a tad longer!

Really2

Graham_Devon wrote: »

I could be spot on with a spread like that!

Darker the colour the more likely.
Here is how they have done.

Really2

treliac wrote: »

But it won't be until after the election of course. People can carry on believing they are entitled to cheap mortgages for a tad longer!

TBF I do not think I am entitled to a cheap mortgage, with the debt in the system, slack, taxes etc growth will be slow.
I can not really see rates going up that fast or high TBH for a long time.

treliac

Really2 wrote: »

TBF I do not think I am entitled to a cheap mortgage, with the debt in the system, slack, taxes etc growth will be slow.
I can not really see rates going up that fast or high TBH for a long time.

But then you understand the system Really.

lemonjelly

Really2 wrote: »

As far as I can tell The BOE have been fairly spot on.

But they may put it up a tiny bit if we do grow quickly, but inflation is not that high really.

Cant see it going any where near 5% for years TBH.

I agree that the BoE have been fairly consistent. However I can't help but feel that rate rises are possible this year. We have apparently turned the corner, avoided the double dip, & are allegedly growing faster than other economies. That = inflation to me (even though we will continue to see wage freezes I feel).

In addition, do we need rates to stay as low as they are for a long time. I'd suggest we don't.

Realistically I can see small(ish) rises on the horizon. Perhaps 2-2.5% by year end?

HAMISH_MCTAVISH

lemonjelly wrote: »

I agree that the BoE have been fairly consistent. However I can't help but feel that rate rises are possible this year. We have apparently turned the corner, avoided the double dip, & are allegedly growing faster than other economies. That = inflation to me (even though we will continue to see wage freezes I feel).

I'd mostly agree with that.

In addition, do we need rates to stay as low as they are for a long time. I'd suggest we don't.

As low as they are? No, probably not. Rates should start rising by the end of this year or early next.

But lower than previously, for longer than previously? Yes, I think so.

The lower the base rate, the more money available for spending in the economy, and it'll take several years of growth to return to 2007 levels of GDP.

Realistically I can see small(ish) rises on the horizon. Perhaps 2-2.5% by year end?

Perhaps 0.75% or 1% by year end..... I doubt we'll see 2.5%, which IMO is the new neutrality point, before 2012 or 2013 TBH.

Really2

lemonjelly wrote: »

are allegedly growing faster than other economies. That = inflation to me (even though we will continue to see wage freezes I feel).

Well the eurozone posted 0.0%;) So in reality growing faster than others does not mean a stable recovery.

I think 2%-2.5% would be massive (+2% would be 8 months of .25% increases)

I think if they do go up this year (which is unlikely) the max you would see is 2X .25% rises.

They will not do big rises due to the fragility of the economy so .25% and leaving it for a few months to see how things go is the most likely.

purch

He said official rates may have to rise in Britain 'a little earlier than elsewhere'

No where does Pier Carlo Padoan say that he thinks that the BOE will need to raise the Base Rate anytime soon.