Inflation around where it should be / tiny bit higher than target --> interest rates?

pph

Hi with inflation around where it should be or even a tiny bit higher than target, what do you think about the likelihood of a rate raise in the near future?

Cheers!

edinburgher

what do you think about the likelihood of a rate raise in the near future?

Haven't read anything of any quality that has forseen rates rising any time before the end of 2011... Then again, economics can be framed however you like to match your argument

Paul_Herring

pph wrote: »

what do you think about the likelihood of a rate raise in the near future?

It's about as likely in the near future as the actual percentage at the moment.

C_Mababejive

There is no likelihood of a rate rise in the near or middle future IMHO.

All those suckers out there who have instant access savings accounts will continue to be milked as will all the ISA brigade.

Dont expect any fierce ISA competition in the run up to April either as the ISA is now officially dead in the water. They know they have your cash locked up and you are reluctant to close an ISA.

Only the other day the CBI were urging the BoE to keep rates as low as they are AND to inject some more QE !!!

Have a bit of this while you can

http://www.newcastle.co.uk/savings/Five-Year-Bond-2

sabretoothtigger

Why would we ever raise interest rates, it only makes things cost more ? If we go on that idea, rates wont rise for years to come but I think the factors involved are perhaps beyond the horizon

FT on inflation - http://www.ft.com/cms/s/0/ecca5704-6f01-11df-a2f7-00144feabdc0.html&usg=AFQjCNFyEx0PEh2VR2KiXnIejnPSyRZktw

ManAtHome

pph wrote: »

Hi with inflation around where it should be or even a tiny bit higher than target

55% over isn't really a tiny bit... Mind you, BoE central projection in Feb (this year..!) was that CPI should be under 2% about now, rising to 2% sometime in 2013 (June/July 2010 was allegedly the low-point in the series).

BoE report (page 40 has the charts) http://www.bankofengland.co.uk/publications/inflationreport/ir10feb.pdf

sabretoothtigger

You might have a point about dollars. If we did raise rates it would change the exchange rate and usa is our biggest customer I think. The BOE is second to the FED

All the same the other points about savers or mortgages is hugo chavez type thinking. Or Mugabe who closed the stock market because it produces inflation and caused food prices to rise.
In fact Ive heard that said about usa investment banks too so maybe those events are more likely to spread then rates rising.
Politics over economics or maths even.

"We're not expecting any rise in base rates this year or next, perhaps not until late 2012 or even 2013," Paul Diggle, a housing economist at Capital Economics, told MSN.

http://money.uk.msn.com/news/uk-economy/articles.aspx?cp-documentid=154555939