We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
BoE keeps rates at record low 0.5 pct for 22nd month
inspector_monkfish
Posts: 9,276 Forumite
12:00 13Jan11 - BANK OF ENGLAND MAINTAINS BANK RATE AT 0.5 PCT
12:00 13Jan11 - BoE keeps rates at record low 0.5 pct for 22nd month
LONDON, Jan 13 - The Bank of England kept its key interest rate at a record low 0.5 percent as expected on Thursday, judging that longer-term downward pressure on prices will quell an expected short-term spike in inflation.
British consumer price inflation was 3.3 percent in November and is forecast to rise to 4 percent in the coming months due to higher food and fuel costs and last week's rise in the sales tax.
But the central bank forecasts that by early next year inflation will fall back to its 2 percent target -- which it has exceeded since December 2009 -- as it does not expect the temporary rise in inflation to have a lasting effect.
Economists polled by Reuters last week were unanimous in the view that the BoE would keep its interest rates on hold and make no change to the 200 billion pounds of quantitative easing asset purchases conducted from March 2009 to February 2010.
However, financial markets are now pricing in a strong chance of an interest rate hike as early as May, as they predict the BoE will be forced to take action to defend its credibility in the face of rising public inflation expectations.
Minutes of the BoE Monetary Policy Committee's meeting on Wednesday and Thursday will not be published until Jan. 26, but economists expect a repeat of the three-way split that has been in place since October.
MPC member Andrew Sentance has been calling for a rate rise since June, now that the economy is no longer in recession, while his colleague Adam Posen believes more quantitative easing is needed due to a lack of bank lending to support the recovery.
The other 7 members of the MPC have voted to keep policy unchanged.
The BoE faces a high degree of economic uncertainty at the moment. The coldest December in 100 years has made it hard to judge the underlying rate at which the economic recovery is losing pace.
While Britain's small manufacturing sector is getting a strong boost from exports, the domestically focused services sector is suffering from weak demand due to high household indebtedness and looming government spending cuts.
12:00 13Jan11 - BoE keeps rates at record low 0.5 pct for 22nd month
LONDON, Jan 13 - The Bank of England kept its key interest rate at a record low 0.5 percent as expected on Thursday, judging that longer-term downward pressure on prices will quell an expected short-term spike in inflation.
British consumer price inflation was 3.3 percent in November and is forecast to rise to 4 percent in the coming months due to higher food and fuel costs and last week's rise in the sales tax.
But the central bank forecasts that by early next year inflation will fall back to its 2 percent target -- which it has exceeded since December 2009 -- as it does not expect the temporary rise in inflation to have a lasting effect.
Economists polled by Reuters last week were unanimous in the view that the BoE would keep its interest rates on hold and make no change to the 200 billion pounds of quantitative easing asset purchases conducted from March 2009 to February 2010.
However, financial markets are now pricing in a strong chance of an interest rate hike as early as May, as they predict the BoE will be forced to take action to defend its credibility in the face of rising public inflation expectations.
Minutes of the BoE Monetary Policy Committee's meeting on Wednesday and Thursday will not be published until Jan. 26, but economists expect a repeat of the three-way split that has been in place since October.
MPC member Andrew Sentance has been calling for a rate rise since June, now that the economy is no longer in recession, while his colleague Adam Posen believes more quantitative easing is needed due to a lack of bank lending to support the recovery.
The other 7 members of the MPC have voted to keep policy unchanged.
The BoE faces a high degree of economic uncertainty at the moment. The coldest December in 100 years has made it hard to judge the underlying rate at which the economic recovery is losing pace.
While Britain's small manufacturing sector is getting a strong boost from exports, the domestically focused services sector is suffering from weak demand due to high household indebtedness and looming government spending cuts.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
0
Comments
-
BOE says the same thing for the 16th month:But the central bank forecasts that by early next year inflation will fall back to its 2 percent target -- which it has exceeded since December 2009 -- as it does not expect the temporary rise in inflation to have a lasting effect.
0 -
Bad news IMHO! With the current rising rate of inflation the MPC will miss the boat and we will see significantly higher interest rates later on as a result.There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0
-
old news, i could have told you that yesterday :0)
i keep telling my dad sentence, if he keeps on trying to push the rate up he's going to have to ask for a payrise to cover off my extra mortgage0 -
Yeeeesssss.:beer:
Good on the BOE. They are giving homeowners a chance to get some meat on the bone. Lets keep it low for another 2 years at least. Best news I've had all week.We love Sarah O Grady0 -
Maybe those on a base rate + a bit tracker are putting some meat on the bone, but the banks seem to be filling their bellies at the moment (much to Hamish's displeasure)30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
-
Can you imagine the amount of posting on this board and others when rates do go up.
We'll here comments like : Timber, This is the start of the next leg down, etc etc... it will be painful to say the least0 -
REAL_MEN_BUY_HOUSES wrote: »The BOE knows which side its bread is buttered on and who really is important in this society (e.g. home owners) and who's not (e.g. renters, savers, etc) Thumbs up from privileged society.
What about homeowners with savings?0 -
hopefully we'll see some increase shortly.0
-
inspector_monkfish wrote: »British consumer price inflation was 3.3 percent in November and is forecast to rise to 4 percent in the coming months due to higher food and fuel costs and last week's rise in the sales tax.
There is no extra inflation due to the VAT rise because it went up last year as well.0 -
There is no extra inflation due to the VAT rise because it went up last year as well.
Yes but inflation should have reduced as the year expired, and now won't as VAT has risen again.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.8K Banking & Borrowing
- 254.5K Reduce Debt & Boost Income
- 455.6K Spending & Discounts
- 247.6K Work, Benefits & Business
- 604.5K Mortgages, Homes & Bills
- 178.6K Life & Family
- 262.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards