BOE Now Expected To Hike Later Post Poor GDP Data

inspector_monkfish

09:48 25Jan11 - MARKET TALK: BOE Now Expected To Hike Later Post Poor GDP Data


0948 GMT - The weak UK GDP report has prompted market participants to push expectations of the next BOE rate hike further out, with the next hike now likely to come in September vs previous expectation of a rate hike in July.

The second rate hike is now seen in January 2011 vs previous expectation of a rate rise in December this year.

smeagold

and plus another good dose of QE meaning yet more inflation

gagahouse

smeagold wrote: »

and plus another good dose of QE meaning yet more inflation

via a weaker Sterling too for a double whammy

worldtraveller

gagahouse wrote: »

via a weaker Sterling too for a double whammy

Just beat me to it!

smeagold

plus booming international commodity prices meaning... yet even more inflation.

michaels

How are swap rates - will all those cheap fixes be back all of a sudden?

RenovationMan

This is great news for me and my 'Huge Mortgage Gamble'. I was getting quite concerned that rates may have gone up before I could make my next 10% overpayment in June.

I kept saying on all of the interest rate threads that the BoE will not raise rates until they see the result of the governments Austerity package. We have seen the result - a contraction in the economy which means inflation will fall. It just didnt make any sense whatsoever to raise rates while the conomy is in such a precarious position. I just dont understand why people cant see that?

Heyman_2

RenovationMan wrote: »

This is great news for me and my 'Huge Mortgage Gamble'. I was getting quite concerned that rates may have gone up before I could make my next 10% overpayment in June.

Only ever in the minds of journalists, bloggers and disgruntled savers who jumped on the interest rate rise bandwagon this month, RM.

It wasn't ever a particularly convincing case and in my opinon we won't see a rise now until well into next year at least.

smeagold

RenovationMan wrote: »

This is great news for me and my 'Huge Mortgage Gamble'. I was getting quite concerned that rates may have gone up before I could make my next 10% overpayment in June.

I kept saying on all of the interest rate threads that the BoE will not raise rates until they see the result of the governments Austerity package. We have seen the result - a contraction in the economy which means inflation will fall. It just didnt make any sense whatsoever to raise rates while the conomy is in such a precarious position. I just dont understand why people cant see that?

You mean the old spare capacity argument? not when your a competitor in a global market for commodities, you know food fuel that kind of stuff, and your currency is depreciating.

Euphoria1z

inspector_monkfish wrote: »

09:48 25Jan11 - MARKET TALK: BOE Now Expected To Hike Later Post Poor GDP Data


The second rate hike is now seen in January 2011 vs previous expectation of a rate rise in December this year.

im abit confused. When are they now expecting to start raising rates?

RenovationMan

Heyman wrote: »

Only ever in the minds of journalists, bloggers and disgruntled savers who jumped on the interest rate rise bandwagon this month, RM.

It wasn't ever a particularly convincing case and in my opinon we won't see a rise now until well into next year at least.

The trouble is that the politicians are led by public opinion and the public is led by the media. You could see that the BoE was coming under increasing pressure to 'do something', and I could see them capitulating and raising rates. Luckily the scenario that the BoE have been predicting from the start is now beginning to play out, which will reduce the pressure somewhat, at least over the short-term.