BBC's Evan Davis: IRs could hit 6%

meanmachine_2

lisyloo wrote:

What he apparently said was that there was talking in the city of interest rates of 6%.
I believe he is right in saying there is talk.
I don't believe he said that rates will be 6%.

That's what I said - talk in the city.

But then talk in the city was wrong last time when cuts in IRs were forecast, so who knows?

6% would probably kill the property market stone dead, and we've seen what that's done in the US, so that is likely to be avoided.

If oil was still at $70 and rising, I'd be more inclined to believe it.

tonydee

Milarky wrote:

Surely the BOE has a strategy of raising rates by stealth over a number of 'mini-cycles' (eg 2 years each) so that markets and borrowers don't take fright. The last cycle took us from about 3.75% to 4.75% - with a 'retrace' of one 0.25% cut in each case (i.e 3.75% was cut to 3.5% for 3 months - which marked the bottom in 2003 - and 4.75% was cut to 4.5% - for a whole year! - before moving back to 4.75%, and the commencement of another cycle. With many fewer credentials than 'city-talkers' therefore, I would hazard that 4.75% to 5.75% is the next 'likely' cycle (possibly to 5.5% instead - but in that case there would still have to be a 'last' rise to 5.75% - followed by a cut to 5.5% after four to six months to mark the start of the next period of cuts. Here's how it might look...

3.75 - 4.75 2003 to 2004
4.75 pause 2004 to 2005
4.5 mini dip 2005 to 2006

4.75 - 5.5? 2006 to 2007
5.75 pause late 2007?
5.5 - 5.0? 2008?
4.75 mini dip early 2009? [Election out of the way...]
5.0 - 6.0 2010

If only it was that simple !! Look at the last 30 years of interest rates and this philosphy isn't quite accurate.

_Andy_

Milarky wrote:

Apparently he's also gay!

http://en.wikipedia.org/wiki/Evan_Davis_(journalist)

So? Why is that of any relevance - also, why the exclamation mark like being gay is a big deal?

rsykes2000

undercoat11 wrote:

Ooh that is truly disgusting. I shall think of him in a different light now.

How narrow-minded :rolleyes2

ManAtHome

undercoat11 wrote:

Ooh that is truly disgusting. I shall think of him in a different light now.

Me too, can't think of anything worse....


I mean.... a Harold!