boe rate rise november?

jamescredmond

for the past month financial journalists in certain sections of the media have been talking up an int. rate rise, with most agreeing that an increase of 1/4%
looks likely.

is this idle speculation by city hacks with columns to fill or something more serious?

regards

masonic

It's always idle speculation until it transpires.

humfer

Its all guess work (with plenty of research behind it) - look at the rise in August which took quite a few people by shock. However I think inflation rose to 2.5% last month and was about the BOE's 2% aim for the 4th month on the trot (I think) so I wouldn't bet against at least one more 0.25% rise by the end of the year, with November the most likely month

mystic_trev

ABN Ambro are saying another one this year, and one (maybe two) more by the middle of next year.

Mr_Mumble

Sterling futures traders wouldn't call it idle speculation given the amount of money at stake and they've been expecting a .25% rise in November since August 3rd.

The yield on the interest-rate futures contract due December rose 7 basis points in the week to 5.24 percent. The contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the central bank's official rate for the past decade.

http://www.bloomberg.com/apps/news?pid=20601102&sid=auHn6vwnA1X0&refer=uk

Remembered CNBC carry the short sterling future info, just took a snap:

humfer

mystic_trev wrote:

ABN Ambro are saying another one this year, and one (maybe two) more by the middle of next year.

Yeh I had heard that as well - 2 more by mid June 2007. Not sure whether to be :T or :mad: . Good for my savings but not good as my fixed mortgage deal will come to an end at the end of next year

Hereward

humfer wrote:

Yeh I had heard that as well - 2 more by mid June 2007. Not sure whether to be :T or :mad: . Good for my savings but not good as my fixed mortgage deal will come to an end at the end of next year

It will only be good for savings if the banks, and building societies, decide to pass the full rate increase. Just look at how long it took and the actual increases they passed on in August (or should that read September :rolleyes: ). They will definetly be quick to pass on the rate increase, and probably a bit more, on loans and mortgates.

ReportInvestor

Sunday Times Money warned homeowners today of "further rate pain".

The City is expected rates to hit 5.25% in 2007, with a hike to 5.00% in November, as suggested by the OP.

Speculator

Great news! Savings rate goes up and I will be in HK for the majority of next year and the HK dollar is pegged to the US dollar!:):) My Nationwide debit card will come in very handy.

thor

I think it is very likely that rates will go up sooner rather than later. In fact it light of the reports about house prices booming again I would not be surprised to see them go up in October or November(just in time for Christmas). Of course savers at banks & building socities will on average only see a fraction of this increase on their saving rates.

ReportInvestor

Independent

Gordon hints at rate increases

Only the second time under his tenure that the Treasury has given a "steer" to the MPC.

".......Mr Brown, who is chair of the IMF's monetary and financial committee, also flagged up the need for higher borrowing costs across the world."