boe rate rise november?

hobbesandco

Interest rates will definitely go up in November. Inflation is now at its highest since Labour came into power in 1997, manufacturing and exports have picked up in the past year and with the housing market seeming to reach ever more dizzying heights we'll be looking at BOE base rate of 5%. Not sure about next year though. Anything could happen by then.

Chrismaths

From looking at the redemption yield on short term gilts here, you can see that the market is pricing in a rise in interest rate very soon, as a simple way of looking at these yields is as the "expected average interest rate to redemption".

So the market expects interest rates to rise to 5% very soon (maybe even this month or next, rather than november, with a possibility of a rise to 5.25% early next year (though the market has less conviction in this), followed by a cut/hold at 5% in the last quarter of 2007.

jamescredmond

ReportInvestor wrote:

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."

thanks. let's hope the dour scot leaves the mpc to do it's work as he intended back in '97. independently.

jamescredmond

Chrismaths wrote:

From looking at the redemption yield on short term gilts here, you can see that the market is pricing in a rise in interest rate very soon, as a simple way of looking at these yields is as the "expected average interest rate to redemption".

So the market expects interest rates to rise to 5% very soon (maybe even this month or next, rather than november, with a possibility of a rise to 5.25% early next year (though the market has less conviction in this), followed by a cut/hold at 5% in the last quarter of 2007.

thanks chris. too late [ or financially intellectual)
to discuss this for me. either way, it answers the question.

many thanks.

free4440273

looking even further ahead, and readily accepting that rates will go up perhaps twice at 0.25 per cent by the end of the year, futures are pricing in a reduction for the the second half/last quarter of 2007. obviously anything can happen between now and then...i actually wish rates would stay intact, after the increases of 2006, right into 2007 because of a bond i am holding. like everybody else, vested interests in certain happenings i suppose. anyway, have a great Tuesday everyone

activetrader

jamescredmond wrote:

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

The subject is rich in speculation.