BOE member votes again for rate rise

Dirk_Rambo

i hope intrest rates go up so my old gran can get a bit more intrest on her few shillings in the post offiice. itd be the right thing to do

ess0two

Dirk_Rambo wrote: »

i hope intrest rates go up so my old gran can get a bit more intrest on her few shillings in the post offiice. itd be the right thing to do

I'm sure .25% rise will make a world of difference.

sabretoothtigger

Is this committee thing still the one thing Labour did right. I expect them to disagree more, it seems obvious rates should at least go to 1 or 1.5% at least as a warning to risk takers.
It has to be 5 again at some point, somehow I think we are leaning on the usa policy system or it would make no sense


Rambos gran isnt saving money, she is losing it securely unfortunately. Hopefully the majority of her income is secured by better means then bank of england promissory notes

Really2

sabretoothtigger wrote: »

seems obvious rates should at least go to 1 or 1.5% at least as a warning to risk takers.

I find that as an odd comment from you, rates are currently set to help recovery.

Rates are never set to punish or reward anybody, they are either a reflection of a reaction to inflation or (as now) to promote economic stability.

I think the warning to risk takers are already there, look at loan rates and mortgages with little or no equity.
Lenders should set rates to mitigate risk, not the central bank IMHO.

Sibley

We need to keep rates as low as possible now. Give the working families a chance to clear any debts. That way it won't hurt anyone when rates rise. If the government had not taken these measures many would have lost thier homes. Now most have paid down their mortgages/credit and are sitting pretty. I think those hoping to see a lot of reposessions will have a nasty shock when they realize what a strong position homeowners are in now. Good on the government for choosing the working man for a change.

sabretoothtigger

I find that as an odd comment from you, rates are currently set to help recovery.

Recover what, the boe is supposed to just maintain the currency not the whole economy, they control rates independently now but are still playing the game it seems, so whats the point.
If inflation is above his objective then its consistently failing so its a case of say one thing and do another, the plague of modern economics is mind games

Lenders should set rates to mitigate risk, not the central bank IMHO.

The free market should set interest rates, we do agree. Do you think they'd set them to 0.5%
Im all for free money if it could be that way, if they carry on it'll only achieve the opposite

ManAtHome

Sibley wrote: »

Now most have paid down their mortgages/credit and are sitting pretty.

Yer 'avin a giraffe... personal debt has increased over the last couple of years, although by a much smaller rate than the previous 5 years http://www.creditaction.org.uk/debt-statistics.html

Some people may well be paying down and 'sitting pretty', but doesn't look like most are. Of course, if everything's now hunky dory, wouldn't be a problem if BoE rates went up would it?

Low rates are good for govt debt, and helps keep the jackanory vaulations of commercial bank debts in the black, but has done next to BA for many 'hard working families' (unless your definition of HWFs only means anyone with a BoE tracker mortgage).

Generali

ManAtHome wrote: »

Yer 'avin a giraffe... personal debt has increased over the last couple of years, although by a much smaller rate than the previous 5 years http://www.creditaction.org.uk/debt-statistics.html

Some people may well be paying down and 'sitting pretty', but doesn't look like most are. Of course, if everything's now hunky dory, wouldn't be a problem if BoE rates went up would it?

Low rates are good for govt debt, and helps keep the jackanory vaulations of commercial bank debts in the black, but has done next to BA for many 'hard working families' (unless your definition of HWFs only means anyone with a BoE tracker mortgage).

From your link:

Total UK personal debt at the end of June 2010 stood at £1,457bn. The twelve-month growth remained at 0.8%. Individuals owe more than what the whole country produces in a year.

Debt adjusted for inflation is falling and wages are rising faster than debt so servicability is getting easier.

stueyhants

Call me suspicious but I think this one vote is just PR orchestrated by the committee as a whole. The BoE has to be seen to take inflation seriously and this vote gives them some credibility in that position. A period of higher than normal inflation will do wonders for the debts of the country and is probably at the core of the BoE and government 'policy'. I'm sure there is no offical policy on this issue but more of a nod and wink between the gov and BoE, say one thing to the market and then do the other.

Heyman_2

stueyhants wrote: »

Call me suspicious but I think this one vote is just PR orchestrated by the committee as a whole.

Good grief.