Grim News: BoE Inflation Report to show CPI hitting targets

oldvicar

The South Wales Evening Post anticipates this morning's BoE Quarterly Inflation Report:

THE Bank of England's latest Inflation Report is likely to make grim reading when it is released on Wednesday, according to analysts.
....
The Consumer Price Index (CPI) inflation rate edged closer to the Bank's target of two per cent last month.

Whilst The Guardian reports:

British homeowners are in for a boost as King is expected to say that interest rates will be maintained at their historic low of 0.5%, or close to that, for at least several more months.

So is it Good News, or Doom n Gloom ?

wymondham

Interest rates kept this low is not a good sign for many people, and shows how bad things are still, especially as he forcasts it staying low for a few more months!

michaels

Inflating away debt becomes more difficult when you are unable to keep inflation as high as you had intended....

Wookster

Well it is definitely good news that inflation is falling and is likely to continue to fall.

IMO it is the destruction of disposable incomes over the last 3 years through high inflation & wage settlements not keeping up that has caused the recession.

Generali

michaels wrote: »

Inflating away debt becomes more difficult when you are unable to keep inflation as high as you had intended....

M4 fell by 5.2% in the year to June 2012 with M4 lending falling 6.2% over the same period:

http://www.bankofengland.co.uk/statistics/Pages/fm4/2012/jun/default.aspx

I reckon the BoE will be writing a letter explaining why they undershot the inflation target before 2013 starts and there'll be a minus sign in front of the RPI figure before this time next year.

homelessskilledworker

The best thing that could happen to those heavily mortgaged or even anyone in too much debt would have been a few years high inflation. I was convinced they would go down this road in order to save a sizable minority that could do untold damage to our economy.

Back in the 70's when homeowning baby boomers were at their working peak they all had their lovely big mortgages inflated away to peanuts. The way things are going now with low inflation(and it has been a success story over last 15 years) there are many who might as well just say goodbye to a property ladder and say hello to the slow boiling frog scenario.

Generali

homelessskilledworker wrote: »

The best thing that could happen to those heavily mortgaged or even anyone in too much debt would have been a few years high inflation. I was convinced they would go down this road in order to save a sizable minority that could do untold damage to our economy.

Back in the 70's when homeowning baby boomers were at their working peak they all had their lovely big mortgages inflated away to peanuts. The way things are going now with low inflation(and it has been a success story over last 15 years) there are many who might as well just say goodbye to a property ladder and say hello to the slow boiling frog scenario.

Maybe.

The problem is, as many early 90s homeowners will testify, high inflation goes hand-in-hand with high interest rates. The value of the principal sum is inflated away but by crikey you pay for it in interest bills.

There is no such thing as a free lunch.

DiggerUK

michaels wrote: »

Inflating away debt becomes more difficult when you are unable to keep inflation as high as you had intended....

But it does give scope for them to stoke up the boiler with more printy printy to achieve that end.

This IMF report, which is far more detailed than the original report from May, not only argues the case for more "plain vanilla QE", but suggests a further cut in base rate as well.
You need to get to page 30, a section entitled "Monetary & Credit Easing Policies"
..._

homelessskilledworker

DiggerUK wrote: »

But it does give scope for them to stoke up the boiler with more printy printy to achieve that end.

This IMF report, which is far more detailed than the original report from May, not only argues the case for more "plain vanilla QE", but suggests a further cut in base rate as well.
You need to get to page 30, a section entitled "Monetary & Credit Easing Policies"
..._

This is said far too often, that the bank will just go off and keep printing loads of dosh everytime there is a headache in the UK economy.
I do not see that happening, how many times did you read in the history books about Micky Mouse economists and leaders looking like complete tools trying to print their way out of trouble, money printing the sign of a out an control economy led by muppets.

Yeah we are bad, but not that bad are we??

oldvicar

DiggerUK wrote: »

But it does give scope for them to stoke up the boiler with more printy printy to achieve that end.

When its fully stoked, light the ble touchpaper ... and retire.

Seriously, I'm sure they are doing the 'stoking' for good reasons, but the more they do it, then I believe the greater the potential for hyper inflation in future, which makes me uncomfortable.

ruggedtoast

homelessskilledworker wrote: »

The best thing that could happen to those heavily mortgaged or even anyone in too much debt would have been a few years high inflation. I was convinced they would go down this road in order to save a sizable minority that could do untold damage to our economy.

Back in the 70's when homeowning baby boomers were at their working peak they all had their lovely big mortgages inflated away to peanuts. The way things are going now with low inflation(and it has been a success story over last 15 years) there are many who might as well just say goodbye to a property ladder and say hello to the slow boiling frog scenario.

The Boomers. I knew the boomers would have something to do with this.

I have suspected them all along.