BOE told to raise interest rates this year - OECD

Graham_Devon

Taken the snippet I'm concentrating on. And I'm concentrating on it because it's what I have been saying for over a year....to the tune of ridicule.

The report added, however, that the Bank of England's monetary policy committee would have to act before too long to curb inflation. With the government's preferred measure of annual cost of living increases currently standing at 4.5%, the OECD said the public's belief that inflation would remain high illustrated "concerns about the Bank of England's willingness to tolerate significant and persistent deviations" from the government's 2% target.

"A modest increase in interest rates should be taken during 2011 to stave off increases in inflationary expectations, which are already elevated. As the recovery gathers momentum in 2012, the pace of normalisation of interest rates should be stepped up."

Full article here: http://www.guardian.co.uk/business/2011/may/25/interest-rates-must-rise-oecd

chucky

rates aren't going over 2%/3% for a very, very long time.

it's not any different to what most sensible people on this forum say but you always decide to argue against what they say because of the poster rather than the context of the post. it's quite a predictable change from you.

Graham_Devon

I'm not saying anything. I've already said previously the whole game regarding interest rates has now chanegd with the removal of the target.

I'm just pasting what the OECD has said. Just wanted to clarify that. Have a pop at them if you wish.

chucky

Graham_Devon wrote: »

I'm not saying anything. I've already said previously the whole game regarding interest rates has now chanegd with the removal of the target.

I'm just pasting what the OECD has said. Just wanted to clarify that. Have a pop at them if you wish.

i'm responding to this

Graham_Devon wrote: »

And I'm concentrating on it because it's what I have been saying for over a year....to the tune of ridicule.

Sibley

Who cares?

If rates went up a % or two. They are still low.

I know you want people to struggle but rates would have to be 7% upwards for that to happen.

You are barking up the wrong tree. Try something else. Interest rates wont cause house prices to drop.

tartanterra

Graham_Devon wrote: »

Taken the snippet I'm concentrating on. And I'm concentrating on it because it's what I have been saying for over a year....to the tune of ridicule.


Full article here: http://www.guardian.co.uk/business/2011/may/25/interest-rates-must-rise-oecd

And it's just that....a snippet.

A snippet from an organisation that doesn't specifically have UK interests at heart. Take this snippet;

"George Osborne should remove exemptions on VAT"

What good would that do for anyone in the UK? Who really wants food to increase by 20% overnight?

The BOE may be making a horses ar*e of many things, but at least their priority is exclusively to the UK.

Instead of dictating to the UK what it's tax policy should be, I think the OECD should be concentrating on the shambles that is the Eurozone.
After all, thats where the majority of it's membership is based.
There's nothing wrong with taking financial advice...... but when you get it from an organisation whose membership includes Portugal, Ireland, Greece and Spain, you should take it with a very large pinch of salt.

I think this country should be masters of our own destiny, rather than listening to that lot.

Graham_Devon

tartanterra wrote: »

And it's just that....a snippet.

A snippet from an organisation that doesn't specifically have UK interests at heart. Take this snippet;

"George Osborne should remove exemptions on VAT"

What good would that do for anyone in the UK? Who really wants food to increase by 20% overnight?

The BOE may be making a horses ar*e of many things, but at least their priority is exclusively to the UK.

Instead of dictating to the UK what it's tax policy should be, I think the OECD should be concentrating on the shambles that is the Eurozone.
After all, thats where the majority of it's membership is based.
There's nothing wrong with taking financial advice...... but when you get it from an organisation whose membership includes Portugal, Ireland, Greece and Spain, you should take it with a very large pinch of salt.

I think this country should be masters of our own destiny, rather than listening to that lot.

I agree, mostly!

There are some things that could be removed from the VAT exemptions list though. And it don't have to be food. New builds for a start. Can't really get my head around that one. All the excess is going to the builders, and the treasury are missing out there.

The idea for the exemption on new builds, I believe, was to pass the reduction onto the buyers needing homes. That doesn't work. Newbuilds attract a premium, and even more so now you can get government incentives.

Tha premium could be making its way back to the treasury instead of lining private companies pockets.

Betting too, don't really understand that one.

tartanterra

Graham_Devon wrote: »

I agree, mostly!

There are some things that could be removed from the VAT exemptions list though. And it don't have to be food. New builds for a start. Can't really get my head around that one. All the excess is going to the builders, and the treasury are missing out there.

The idea for the exemption on new builds, I believe, was to pass the reduction onto the buyers needing homes. That doesn't work. Newbuilds attract a premium, and even more so now you can get government incentives.

Tha premium could be making its way back to the treasury instead of lining private companies pockets.

Betting too, don't really understand that one.

A lot of zero rates were created when industries were struggling, i.e. horseracing/betting.

Zero rating of VAT is a useful tool for the treasury, which it doesn't use enough. During times like this, I don't understand why it isn't used more to stimulate growth.

Kennyboy66

Graham_Devon wrote: »

I agree, mostly!

There are some things that could be removed from the VAT exemptions list though. And it don't have to be food. New builds for a start. Can't really get my head around that one. All the excess is going to the builders, and the treasury are missing out there.

The idea for the exemption on new builds, I believe, was to pass the reduction onto the buyers needing homes. That doesn't work. Newbuilds attract a premium, and even more so now you can get government incentives.

Tha premium could be making its way back to the treasury instead of lining private companies pockets.

Betting too, don't really understand that one.

So we have on the one hand a situation where the UK is building far too few new houses, and this lack of supply helps push houses to higher and higher levels and your solution would be to add 20% tax on top.

Have I got this right ?

Graham_Devon

Kennyboy66 wrote: »

So we have on the one hand a situation where the UK is building far too few new houses, and this lack of supply helps push houses to higher and higher levels and your solution would be to add 20% tax on top.

Have I got this right ?

Do you think it would add 20% to the house price?

I don't.

I believe it's more to do with materials (to build) being exempt etc. Not a 20% increase on the cost (value) of the actual house. Though if I'm wrong, I'm wrong.

Kennyboy66

tartanterra wrote: »

A lot of zero rates were created when industries were struggling, i.e. horseracing/betting.

Zero rating of VAT is a useful tool for the treasury, which it doesn't use enough. During times like this, I don't understand why it isn't used more to stimulate growth.

Except the example you cite is not zero rated, it is exempt.

It is similar to financial services (also exempt).

Exempt items means the supplier cannot reclaim input VAT whereas they can if they are supplying zero rated goods or services (new houses, food, books etc).