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!
Attention Armchair Economists
Comments
-
Graham_Devon wrote: »Maybe they should stop predicting so precisely, then?
They don't.
They always issue a spread of possibilities, with the central scenario being 2%. Based on the information at hand at that moment in time.
My point being that the VAT rise to 20% and an oil spike caused by middle east revolutions were absolutely impossible to predict 18 months ago.
When you strip out the effect of those two items, inflation is pretty much bang-on the 2% target. So based on the information they had at the time, they made the right decision.“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 -
Not that precise really.
This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
The MPC doesn't. They use a fan chart, a chart showing a range of probabilities according to their models where inflation will be in future.
Yes, they do.
They release media statements to the news, stating inflation will be back around 2% in the next 12 months.
They have been doing this for at least 2 years.
That's pretty precise if you ask me.
Yes, they use fan charts, but their actual media and press statements use pretty precise predictions.0 -
Graham_Devon wrote: »Yes, they do.
They release media statements to the news, stating inflation will be back around 2% in the next 12 months.
They have been doing this for at least 2 years.
That's pretty precise if you ask me.
Yes, they use fan charts, but their actual media and press statements use pretty precise predictions.
They have to believe that their policies are heading inflation back towards 2% otherwise they wouldn't follow those policies!
It's not that the predictions are bad, it's that the job is impossible.0 -
They have to believe that their policies are heading inflation back towards 2% otherwise they wouldn't follow those policies!
It's not that the predictions are bad, it's that the job is impossible.
These are the types of predictions I am talking about...
I note the timeframe has now changed from 12 months to 2 years. But if that isn't precisely predicting something, I don't know what is. The words "insist" and "fall rapidally to target" are pretty strong precise words.But Governor Mervyn King has insisted that while inflation is set to climb towards 5% in the coming months, it will subsequently fall rapidly back to the target rate in two years' time.
Not gonna argue it out, if thats not precise terminology to you, then thats a difference of opinion.
0 -
Graham_Devon wrote: »I note the timeframe has now changed from 12 months to 2 years. But if that isn't precisely predicting something, I don't know what is. The words "insist" and "fall rapidally to target" are pretty strong precise words.Not gonna argue it out, if thats not precise terminology to you, then thats a difference of opinion.
All forecasts are subject to uncertainty, I am sure everyone is aware of that.
I also would suggest that inflation of 5% is not really so far from a target of 2% +/-1%0 -
Graham_Devon wrote: »These are the types of predictions I am talking about...
I note the timeframe has now changed from 12 months to 2 years. But if that isn't precisely predicting something, I don't know what is. The words "insist" and "fall rapidally to target" are pretty strong precise words.
Not gonna argue it out, if thats not precise terminology to you, then thats a difference of opinion.
As I say, if he thought otherwise he'd vote for different policies.
The trouble is, you're mistaking sound bites for policy. If you want to see what they think is going to happen to inflation, read the quarterly inflation report. If you want to see a journalists interpretation of what a member of the MPC said in a brief conversation read the BBC website or whatever.
Don't imagine for a moment that the members of the MPC are fools. They understand full well the range of risks ahead and they have access to far more data than you or I. The trouble is when setting interest rates they are effectively trying to do next year's pools coupon.0 -
As I say, if he thought otherwise he'd vote for different policies.
The trouble is, you're mistaking sound bites for policy. If you want to see what they think is going to happen to inflation, read the quarterly inflation report. If you want to see a journalists interpretation of what a member of the MPC said in a brief conversation read the BBC website or whatever.
Don't imagine for a moment that the members of the MPC are fools. They understand full well the range of risks ahead and they have access to far more data than you or I. The trouble is when setting interest rates they are effectively trying to do next year's pools coupon.
This is probably true. But maybe that's the reason people so often talk about credibility. My beef isn't that it's not hard to do their job, and have never suggested that. I suggested my issue with the BOE is to be specifically stating such words as above, time and time again. I don't think it does anyone any favours.0 -
Graham_Devon wrote: »This is probably true. But maybe that's the reason people so often talk about credibility.
Credibility is about whether they are prepared to take the action to get inflation under control. Since granted independence they have been able to keep inflation at around 3% for all bar a few months. I don't think six months of inflation at over 5% will damage that if inflation falls back.0 -
Radiantsoul wrote: »All forecasts are subject to uncertainty, I am sure everyone is aware of that.
Apart from Hamish's. Hamish always gets it right, even when he's wrong.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.4K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.4K Work, Benefits & Business
- 601.2K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.3K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards