OECD: BOE Should Raise Key Interest Rate To 3.5% By End 2011

inspector_monkfish

lemonjelly wrote: »

We don't all earn your kinda salary/bonuses dude. We mere mortals have to cut our cloth accordingly!;)

thats where you are going wrong dude!
don't worry about that, just stick it on the 'never never'

lemonjelly

inspector_monkfish wrote: »

thats where you are going wrong dude!
don't worry about that, just stick it on the 'never never'

send me your PIN...:D

Blacklight

Isn't it the case that they want to inflate away some of that deficit?

worldtraveller

I maintain my view from February that many economists had underestimated what the UK inflation rate would be this year, largely saying, at that time, that it would be around 3% for most of the year and fall back at the end of 2010, into 2011. I continue to believe that it will go to at least 5%+ and I don't expect it to fall back much, if at all, either.

One of my major reasons was that I expected a general continuing weakening in Sterling against the USD. I also expected commodity prices to rise as other economies, especially Asia improve, leaving the UK behind, likely falling back into recession at some point.

IMHO I continue to believe that most economists are not taking this into account sufficiently.

inspector_monkfish

lemonjelly wrote: »

send me your PIN...:D

here you go....

chucky

worldtraveller wrote: »

I maintain my view from February that many economists had underestimated what the UK inflation rate would be this year, largely saying, at that time that it will be around 3% for most of the year and fall back at the end of 2010, into 2011. I continue to believe that it will go to at least 5%+ and I don't expect it to fall back much, if at all, either.

One of my major reasons was that I expected a general continuing weakening in Sterling this year against the USD. I also expect commodity prices to rise as other economies, especially Asia improve, leaving the UK behind, likely falling back into recession.

IMHO most economists are not taking this into account sufficiently.

i didn't have this view but am moving more and more towards it.

price of fuel etc will push inflation up

Really2

chucky wrote: »

price of fuel etc will push inflation up

True, but uncertainty about growth in general will also bring it down.
Oil is nearly the same price now as mid oct. converted to £'s

Mid Oct = $80 Barrel £ = $1.66 = £48.19 Barrel
Now = $70 Barrel £= $1.435 = £48.78 Barrel

It is hard to call where inflation will go on fuel because if oil drags like it is based on europe (and that is why the £ is low), if it stays as it is we will see YOY oil inflation now until Oct but then it could remain flat or even slightly negative again.

for sure we should see some fuel prices drop over the next month as oil is currently around £6 (10%) cheaper than this time last month.

But then will it be passed on.

chucky

Really2 wrote: »

True, but uncertainty about growth in general will also bring it down.
Oil is nearly the same price now as mid oct. converted to £'s

Mid Oct = $80 Barrel £ = $1.66 = £48.19 Barrel
Now = $70 Barrel £= $1.435 = £48.78 Barrel

It is hard to call where inflation will go on fuel because if oil drags like it is based on europe (and that is why the £ is low), if it stays as it is we will see YOY oil inflation now until Oct but then it could remain flat or even slightly negative again.

for sure we should see some fuel prices drop over the next month as oil is currently around £6 (10%) cheaper than this time last month.

But then will it be passed on.

my original view is that inflation was not going to happen - i'm being tempted into the inflation camp as i can't see how increasing imported costs are going to be avoided. currency devaluation obviously should cancel this out but i feel we'll still see inflation.

when i say inflation, i'm talking 5%-7% not 10%-20%!!!

PasturesNew

RenovationMan wrote: »

I hope they wait until I've achieved part of my overpayment quest or I'm in a bit of trouble!

I want my interest back on my savings ..... I was robbed. You've benefitted. Now it's my turn again.

Milarky

worldtraveller wrote: »

I maintain my view from February that many economists had underestimated what the UK inflation rate would be this year, largely saying, at that time, that it would be around 3% for most of the year and fall back at the end of 2010, into 2011. I continue to believe that it will go to at least 5%+ and I don't expect it to fall back much, if at all, either.

IMHO I continue to believe that most economists are not taking this into account sufficiently.

When will they? They move in packs after all. Group-think helped to get us where we are now. Are they about to abandon the consensus? Surely 2% 'extra' inflation for a couple of years does no harm to anyone - eh??