BoE Interest Rate Up/Down/No change

SPAMISH_MCTAVISH

What is your prediction for tomorrow?

Sibley

You should have made the poll for all of 2011. No change.

I don't think rates will reach 5% or more for at least 5 years maybe more.

nembot

It's comments like that which make you look a lil silly sibbers.

You have no idea what's going to happen next month, nevermind 5 years from now.

Generali

I wouldn't be surprised to see a rate rise or 2 this year, maybe more. Now isn't the time I think.

Heyman_2

If they do anything at all with rates with year, it will be for posturing value only.

A kind of "we're still here" message from the MPC, rather than it having anything to do with the economy.

HAMISH_MCTAVISH

Heyman wrote: »

If they do anything at all with rates with year, it will be for posturing value only.

A kind of "we're still here" message from the MPC, rather than it having anything to do with the economy.

Absolutely.

There is no economic reason to raise rates until well into 2012. Doesn't mean they won't bottle it and feel the need to send a message earlier than that though.

Graham_Devon

Lot of pressure this morning from varying areas for a rate rise, with talk of the BOE not doing it's job.

Also an interesting question was bought up by one caller, asking if it's all worldwide issues, oil, wheat etc, howcome were running the highest inflation, next to Germany in Europe. VAT was mentioned, but as an economist said, it's been rising even if you wipe out the VAT effect.

As someone said, it's ok blaming worldwide issues, but something needs to be done when you are sticking out like a sore thumb.

Interesting times anyway, certainly the pressure seems to be on to bump rates up.

BTW: My call on today? No change.

purch

A kind of "we're still here" message from the MPC, rather than it having anything to do with the economy

I think the Bank needs to send a message, short of a raise, that they are closely monitoring the situation and maybe even moving their bias towards tightening.

These perpetual arguments between Posen and Sentance do nothing for the credibility of the Bank, and send the wrong message to the markets.

Generali

purch wrote: »

I think the Bank needs to send a message, short of a raise, that they are closely monitoring the situation and maybe even moving their bias towards tightening.

These perpetual arguments between Posen and Sentance do nothing for the credibility of the Bank, and send the wrong message to the markets.

I disagree. I think the argument shows that both of them see the potential problems ahead - either that all that cheap money that has been given to the banks (effectively at least) finds its way into the wider economy and causes a very damaging inflation or that the deleveraging continues and causes a very damaging deflation.

Either or neither are very possible outcomes from here. If the MPC weren't looking at both as possible then they'd be incompetent.

Really2

Graham_Devon wrote: »

howcome were running the highest inflation, next to Germany in Europe. VAT was mentioned, but as an economist said, it's been rising even if you wipe out the VAT effect.

Vat added around 1.1% to CPI across last year. So without VAT we would be at 2.2% so he is right it is going up without VAT but how much of that is down to Oil and wheat etc.

So the two of the biggest european economies have the highest inflation what is causing it then? have we got more money competing for goods or is it likely the reasons above?
PS has he not seen Greece's Inflation....

Rates may go up slightly this year (possibly to 1%) but it is likely to be a token and not really going to dent inflation.

No change today by the way for me too.

Graham_Devon

Really2 wrote: »

Vat added around 1.1% to CPI across last year. So without VAT we would be at 2.2% so he is right it is going up without VAT but how much of that is down to Oil and wheat etc.

So the two of the biggest european economies have the highest inflation what is causing it then? have we got more money competing for goods or is it likely the reasons above?
PS has he not seen Greece's Inflation....

Rates may go up slightly this year (possibly to 1%) but it is likely to be a token and not really going to dent inflation.

No change today by the way for me too.

So again, what is your solution?

Leave it? I'm only passing on what others are saying outside of this forum. Other economists. They seem to think differently to many on here. However, I still think many on here have the mortgage costs at the back of their minds.

I mean to say next to Greece, when I said next to Germany, so apologies for that error.