British Economy Booming

wotsthat

Graham_Devon wrote: »

When it that? If it's not when the "british economy is booming" as you have stated?

I think Rinoa deliberately used the word 'booming' rather than 'gathering pace' to elicit a response such as yours.

Graham_Devon

Mr._Pricklepants wrote: »

Like Rinoa says, when conditions permit.

When is that though?

You appear willing to let us know what conditons permit stimulus...but not when it should start being removed?

Graham_Devon

wotsthat wrote: »

I think Rinoa deliberately used the word 'booming' rather than 'gathering pace' to elicit a response such as yours.

Well he got it.

Surely if he wanted it, he'd be willing to deal with it too?

wotsthat

Graham_Devon wrote: »

You appear willing to let us know what conditons permit stimulus...but not when it should start being removed?

You've already got a thread on the go which covers this. i.e. markets seeing recovery but being worried about it's sustainability in the absence of stimulus.

Mervyn King has been voting for more QE for the last six months - I think he suggested that a real recovery was underway but didn't think it was worth the risk of shelving QE in case the recovery wasn't robust enough. Maybe the risks of too much stimulus outweigh the risks of too little?

Mr._Pricklepants

Graham_Devon wrote: »

When is that though?

You appear willing to let us know what conditons permit stimulus...but not when it should start being removed?

Well, the case for an interest rate rise could be made if we had an overheating economy, surplus demand, spiraling inflation...etc..

None of these applies to the UK economy at the moment.

Rinoa

Graham_Devon wrote: »

Well he got it.

Surely if he wanted it, he'd be willing to deal with it too?

The current recovery isn't what you expected is it?

Where do you think you went wrong with your analysis?

Graham_Devon

Mr._Pricklepants wrote: »

Well, the case for an interest rate rise could be made if we had an overheating economy, surplus demand, spiraling inflation...etc..

None of these applies to the UK economy at the moment.

Oh, so we need to have an overheating economy, just return monetry policy to "normal".

Interesting!

Mr._Pricklepants

Graham_Devon wrote: »

Oh, so we need to have an overheating economy, just return monetry policy to "normal".

Interesting!

No we don't.
But a quarter or two of encouraging GDP figures isn't a case for immediate interest rate rises either.

Graham_Devon

Mr._Pricklepants wrote: »

No we don't.
But a quarter or two of encouraging GDP figures isn't a case for immediate interest rate rises either.

So what is?

So far you have suggested we'd need an overheating economy to remove monetry stimulus/

Now you suggest that isn't the case after being picked up on it.

So when is there a case, in your view, if you have changed your mind so quickly on your previous suggestion?

Mr._Pricklepants

Graham_Devon wrote: »

So what is?

So far you have suggested we'd need an overheating economy to remove monetry stimulus/

Now you suggest that isn't the case after being picked up on it.

So when is there a case, in your view, if you have changed your mind so quickly on your previous suggestion?

No, I said an overheating economy would warrant an interest rate. I also said we didn't have an overheating economy.

Usually it goes like this, Graham. At some point, when this recovery continues, we will come at a point where we will see a bit more wage inflation, peeps having more money to spend again, increasing demand, price inflation, more wage inflation...etc...
At that point I imagine monetary policy can be loosened and interest rates will rise slowly.

I wouldn't hold my breath for hordes of desperate mortgage holders flocking to the MSE forum though.