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BOE in rate shocker

Graham_Devon
Graham_Devon Posts: 58,560 Forumite
Part of the Furniture 10,000 Posts Combo Breaker
in Debate House Prices & the Economy
They have decided, after much deliberation, to keep rates at 0.5%.

Mervyn King commented "While inflation remains high, it will fall back in 2012. Maybe 2013. Could be 2015. Depends if anything happens in the economy really, which, if something does happen, we will monitor it".
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Comments

  • Heyman_2
    Heyman_2 Posts: 1,819 Forumite
    Worth a read -

    How Monetary Policy Works

    http://www.bankofengland.co.uk/monetarypolicy/how.htm
  • Really2
    Really2 Posts: 12,397 Forumite
    10,000 Posts Combo Breaker
    Can someone start a new "When Rates Rise" thread please.
    The news has been out for over half an hour and no one has done one yet.
  • macaque_2
    macaque_2 Posts: 2,439 Forumite
    Graham_Devon wrote: »
    They have decided, after much deliberation, to keep rates at 0.5%.

    Mervyn King commented "While inflation remains high, it will fall back in 2012. Maybe 2013. Could be 2015. Depends if anything happens in the economy really, which, if something does happen, we will monitor it".

    The BOE cannot win on this one. They know interest rates have to go up but the UK is in too much debt. A rate rise could precipitate another banking crisis.

    The question is, will the markets decide for the BOE?
  • mbga9pgf
    mbga9pgf Posts: 3,224 Forumite
    Why would they? Gilts would go up first. and no evidence of that. 14 months of 2.49% on a tracker and mclovin it!
  • macaque_2
    macaque_2 Posts: 2,439 Forumite
    mbga9pgf wrote: »
    Why would they? Gilts would go up first. and no evidence of that. 14 months of 2.49% on a tracker and mclovin it!

    £ versus Euro
    chart?chart_primary_ticker=FX^GBP:EUR&chart_time_period=12_month&canvas_colour=000000&primary_chart_colour=CC0000&use_transparency=0&plot_colour=ffffff&cp_line_colour=1F4F82&margin_left=35&margin_bottom=20&margin_right=20&time_24hr=1&tiny_chart=1&tiny_month_view=1&logo_strength=light&y_axis_left=1&x_axis_plain=1&cp_line=1&cp_line_style=dotline&charting_freq=1_minute&co_dimension^width=629&co_dimension^height=190
  • tomterm8
    tomterm8 Posts: 5,892 Forumite
    Part of the Furniture Combo Breaker
    Hm... I didn't even realize it was leave-bank-rates-unchanged-day. Even MSE Guy has given up reporting on this.
    “The ideas of debtor and creditor as to what constitutes a good time never coincide.”
    ― P.G. Wodehouse, Love Among the Chickens
  • lemonjelly
    lemonjelly Posts: 8,014 Forumite
    1,000 Posts Combo Breaker Mortgage-free Glee!
    http://www.bbc.co.uk/news/business-13713283

    Interestingly, eurozone rates look set to rise in a months time.

    Bit wierd that, making the decision & announcement a month early!
    It's getting harder & harder to keep the government in the manner to which they have become accustomed.
  • ess0two
    ess0two Posts: 3,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Really2 wrote: »
    Can someone start a new "When Rates Rise" thread please.
    The news has been out for over half an hour and no one has done one yet.

    Poshbird/Bohdy will sort one later.
    Official MR B fan club,dont go............................
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    lemonjelly wrote: »
    http://www.bbc.co.uk/news/business-13713283

    Interestingly, eurozone rates look set to rise in a months time.

    Bit wierd that, making the decision & announcement a month early!

    Even more bizzare is the fact they wish to raise them to curb inflation.

    Considering the biggest factors pushing their inflation up are fuel (transport), fuel (domestic) and clothing, they must be absolutely insane.

    Do they not realise they cannot control these things!?
  • ess0two
    ess0two Posts: 3,606 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Graham_Devon wrote: »
    Even more bizzare is the fact they wish to raise them to curb inflation.

    Considering the biggest factors pushing their inflation up are fuel (transport), fuel (domestic) and clothing, they must be absolutely insane.

    Do they not realise they cannot control these things!?

    Rather bizarre innit,at least it'll help people buy houses which is all that matters to most.;)
    Official MR B fan club,dont go............................
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