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

carolt

Sorry, not read the whole thread.

But this is clearly the most important thread of the day, as it shows us the direction we're headed in - interest rates UP, house prices DOWN.

Lovely jubbly.

Generali

lemonjelly wrote: »

(shrug smiley).

Are you bullying me?*

lemonjelly wrote: »

However, if we see an increase in the savings rate, falling retail sales, rising unemployment or falling prices then we'll have possible proof! (NB I'm kinda just checking I understand here...;))

That's about it. Those things are all symptoms or causes of deflation or both. That's the trouble with deflation, what causes deflation and what deflation causes are pretty much the same things.




*Joke

Thrugelmir

Jonbvn wrote: »

There is so much conflicting information ATM. It is almost impossible to plan ahead.

Repay debt.

Build an Anderson shelter in the garden.

Stock pile tinned food.

Pray that the new Government makes a decision on replacement of existing power generation before the lights go out of their own accord.

lemonjelly

Generali wrote: »

That's about it. Those things are all symptoms or causes of deflation or both. That's the trouble with deflation, what causes deflation and what deflation causes are pretty much the same things.

If the causes & the symptons are the same, does this then make it very difficult to stop being a spiral?

mr_fishbulb

Thrugelmir wrote: »

Build an Anderson shelter in the garden.

When I first glimpsed at that, I thought you said Asheron shelter.

Coincidentally quite appropriate!

Generali

lemonjelly wrote: »

If the causes & the symptons are the same, does this then make it very difficult to stop being a spiral?

Yes it does, as the Japanese have discovered. Deflation there has been going on for about 20 years.

You win today's instant prize; a no expenses paid trip to Sydney!

worldtraveller

Britons' expectations for inflation over the next 12 months jumped to 3.3 percent in May, the highest level in nearly two years, a quarterly survey from the Bank of England showed on Friday.

That compared with 2.5 percent in February and was the highest since August 2008.

The sharp rise may be worrying to the BoE which wants to ensure that expectations of above-target inflation do not get entrenched, leading to a long-term cycle of price rises and higher wage demands.

Consumer price inflation hit a 17-month high of 3.7 percent last month, almost double the central bank's target. The survey showed the public was not far off the mark, estimating current inflation at 3.6 percent.

The BoE maintains that the recent spike in inflation is due to temporary factors and price pressures will abate later this year when the economy will also be feeling the pain of public spending cuts.

Britain's central bank has kept interest rates at 0.5 percent since March 2009 and has pumped 200 billion pounds into the economy in the form of quantitative easing.

Britain's economy pulled out of recession at the end of 2009 but the recovery remains fragile and most economists do not expect the BoE to start tightening policy until early 2011.

The survey showed some 52 percent of Britons expect interest rates to rise over the next year compared to 6 percent who see a fall.

Reuters

inspector_monkfish

worldtraveller wrote: »

Britons' expectations for inflation over the next 12 months jumped to 3.3 percent in May, the highest level in nearly two years, a quarterly survey from the Bank of England showed on Friday.

That compared with 2.5 percent in February and was the highest since August 2008.

The sharp rise may be worrying to the BoE which wants to ensure that expectations of above-target inflation do not get entrenched, leading to a long-term cycle of price rises and higher wage demands.

Consumer price inflation hit a 17-month high of 3.7 percent last month, almost double the central bank's target. The survey showed the public was not far off the mark, estimating current inflation at 3.6 percent.

The BoE maintains that the recent spike in inflation is due to temporary factors and price pressures will abate later this year when the economy will also be feeling the pain of public spending cuts.

Britain's central bank has kept interest rates at 0.5 percent since March 2009 and has pumped 200 billion pounds into the economy in the form of quantitative easing.

Britain's economy pulled out of recession at the end of 2009 but the recovery remains fragile and most economists do not expect the BoE to start tightening policy until early 2011.

The survey showed some 52 percent of Britons expect interest rates to rise over the next year compared to 6 percent who see a fall.

Reuters

https://forums.moneysavingexpert.com/discussion/2525901

worldtraveller

inspector_monkfish wrote: »

https://forums.moneysavingexpert.com/discussion/2525901

Missed it