Base rate tommorow?

Graham_Devon

Could actually be something worth talking about?

So, lower, or not?

I'm going to go with yes. Just cus I feel like a little punt, especially after the manufacturing figures today.

DervProf

Would a reduction make any difference though ?

michaels

A cut will merely transfer a small amount of money from the banks profits to those with a base rate tracker mortgage who are probably doing OK at the moment anyway and will likely save their 'windfall'.

Problem (for the BoE) is the fall in inflation means that real interest rates are increasing, exactly the reverse of what the doctor ordered and QE whilst keeping the long end lower does not seem to be resulting in any increase in lending.

Can anyone else think of any other unconventional ways of preventing deleveraging? Would negative interest rates (aka charging banks for their cash reserves) result in them looking for a way to lend? I notice that the current programme seems to have the banks falling over themselves to poach the lowest risk mortgage customers from each other rather than looking likely to result in any increase in total mortgage debt outstanding although I guess if you were in a position to max your borrowing against a property at 3% fixed and earn more than that in a 5 year savings bond (after tax) then it might be tempting, but of course that wouldn't bring any money in to the real economy.

With fiscal loosening ruled out by the bond markets, The only answer I can see is a policy to take money from the wealthy who tend to save and give it to the less wealthy who are most likely to spend, however that is not on the agenda for this govt.

Thrugelmir

michaels wrote: »

Can anyone else think of any other unconventional ways of preventing deleveraging?

Deleveraging will happen, there's no turning back. The BOE is purely trying to manage the process. Whilst maintaining liquidity in the banking system. As there's a lack of wholesale money to enable the banks to refinance their borrowing.

RUN_RABBIT_RUN

Graham_Devon wrote: »

Could actually be something worth talking about?

So, lower, or not?

I'm going to go with yes. Just cus I feel like a little punt, especially after the manufacturing figures today.

nah, going nowhere

at the last minutes, they discussed lowering it but decided they wanted to wait and see how things panned out over the course of the next few months, so i think it'll be closer to christmas before the topic comes up again

more qe though? i think that's the question

andyroberts1967

My guess is that they will wait until the Q3 GDP figures are out, so November at the earliest.

ash28

No change today....

I'm with andyroberts1967 - not before November.

Batchy

I have a 50:50 feeling... the economic GDP fall for last Qtr was so dramatic, it needs to respond, or deal with the consequences of "doing nothing". Will .25 cut be enough, not really, but its actually all they have left themselves able to do, will they do it this month, maybe not. But will they do it, I think yes, they will.

Which is great for me, since August is my last month of "fixed". Its already due to drop, another .25 would be nice!

purch

Graham_Devon wrote: »

I'm going to go with yes. Just cus I feel like a little punt, especially after the manufacturing figures today.

What are you doing ?

Buying Short Sterling ?

Not a lot of upside left :eek:

worldtraveller

Kept at 0.5%. No increase in QE.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £375 billion, financed by the issuance of central bank reserves.

The Committee expects the announced programme of asset purchases to take another three months to complete. The scale of the programme will be kept under review.

BOE MPC

Graham_Devon

Boring!

Actually thought something may happen today!