0.5% growth 1st Quater 2011

shortchanged_2

RenovationMan wrote: »

They are now talking about no BoE rate changes until at least August on the back of this news. Loverly Jubberly .

Maybe good for you RenovationMan (and me) but not really a good sign for the overall strength of the economy.

quantic

Its win win really, if the economy keeps on recovering there is a good chance that house prices will return to an upward trend in rising prices and more than likely the base rate will be upped too. On the other hand, if the economy struggles house prices will continue to stagnate and the base rate will likely remain what it is now. To be honest both are good for my situation but I think i would rather see the economy recover and take a hit on my mortgage payments.

Butterfly_Brain

Q4 2010 = -0.5%
Q1 2011 = 0.5% (Estimated)

= Stagflation

1984ReturnsForReal_2

Generali wrote: »

I thought the main tax influences weren't going to drop out until Jan 2012.

Drop out completely but they still taper

Thrugelmir

Graham_Devon wrote: »

If wage inflation takes over general inflation, we'll be heading towards "no interest rate rises, inflation is falling back".

Wage inflation is suppressed as there's still slack in the wider economy. Such as older semi retired people happy to earn a small wage (e.g. B&Q ) to supplement their income. Also people content to take a 33% wage cut just to have a job.

China is exporting inflation. (No longer just cheap tat). As a consequence imported product costs are squeezing business margins. There's little scope to pass the increased costs onto customers. So for many SME's there isn't the increased profitability to fund large wage rises.

The UK consumer is still heavily indebted. So the longer interest rates remain low. The sooner the consumer will be able to generate more economic activity.

Generali

1984ReturnsForReal wrote: »

Drop out completely but they still taper

Why is that? Were tax rises tapered in? I thought the only substantial tax rise was VAT which will have a cut in and cut out moment on the inflation rates.

HAMISH_MCTAVISH

Thrugelmir wrote: »

the longer interest rates remain low. The sooner the consumer will be able to generate more economic activity.

Someone should really tattoo that on Graham's forehead.

Like this.....

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эldA эd lliw яэmuƧnoƆ эHT яэnooƧ эHT
TiviTƆA ƆimonoƆэ эяom эTAяэnэp oT

Generali

Thrugelmir wrote: »

The UK consumer is still heavily indebted. So the longer interest rates remain low. The sooner the consumer will be able to generate more economic activity.

True. That doesn't mean that base rates have to remain at 0.5% though. They could probably rise to about 2% with very little impact on market rates. The difference is just a subtle transfer from the BoE to banks.

DervProf

shortchanged wrote: »

Maybe good for you RenovationMan (and me) but not really a good sign for the overall strength of the economy.

He isn't bothered about much else, just pops in occasionally to express his pleasure that his stretched finances aren't going to be put under any more pressure (in the near future), and to type a few posts which I rip to shreds.

1984ReturnsForReal_2

Generali wrote: »

Why is that? Were tax rises tapered in? I thought the only substantial tax rise was VAT which will have a cut in and cut out moment on the inflation rates.

You forget fuel duty tapering out.

Also VAT will not have a cut in & cut out effect. It will have a CUT in (max original rate plus 2% + underlying inflation increase if any) & tapering out effect either by month or year to date but limited to a minimum of 2% overall + circa the original inflation rate divided by 12 (not to make things complicated) at 11 months post VAT increase rolling yearly figure.