Will the BOE rate change on Thursday?

Moorepart

The next CPI figure is due on 12 June so unless the BoE already have data which indicates what that's likely to be, it's another argument for holding this month. High street spending is just one indicator of inflation, though - there'll be other things to offset it, e.g. higher petrol prices and latest council tax rises, filtering through soon.

equitydealer

I think there's a 40% chance of a 0.25% rise on Thursday. Last week's factory gate prices were much higher than expected.

http://news.bbc.co.uk/1/hi/business/6559095.stm

Milarky

Why would they do a 'back-to-back' increase when they discussed (and rejected) a 0.5% increase at the last meeting - that would just make them look 'discredited'? It stands to reason that they will have penciled in another 0.25% rise in August (nearly all changes are reserved for the quarterly meetings) and only something really major coming up will deflect them from that

(Ho, ho! The MPC won't be 'deflected' and neither will the rate of inflation!)

ManAtHome

LOL - well they're already pretty much discredited... but on the downside not the upside. I'd go for August as well (and November, but that's for a later thread).

Xbigman

Moorepart wrote: »

The next CPI figure is due on 12 June so unless the BoE already have data which indicates what that's likely to be, it's another argument for holding this month. High street spending is just one indicator of inflation, though - there'll be other things to offset it, e.g. higher petrol prices and latest council tax rises, filtering through soon.

Yes the MPC gets an advanced look at the inflation figures. I recall the shock rise at the beggining of the year being criticized by the CBI and unions, then the inflation figures were announced and they all shut up.
Regards



X

frogman_2

June: No
July: Yes - +0.25%
August: No
September: Maybe - +0.25%
October: At 6%
November: At 6%
December: At 6%

nilrem_2

frogman wrote: »

June: No
July: Yes - +0.25%
August: No
September: Maybe - +0.25%
October: At 6%
November: At 6%
December: At 6%

Lol, You are not Mervyn King are you? :rotfl:

Good advance info! :beer:

DocProc

Well, here it is! Up another 0.25%!!!!!

From http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/07/bcnrates107.xml

Bank raises interest rates to 5.75pc
By Richard Blackden
Last Updated: 11:34am BST 07/06/2007

The Bank of England raised interest rates today for the second month in a row as it struggles to tame inflationary pressures in the economy.

The quarter point increase, from 5.5pc to 5.75pc, will come as a shock to the City’s economists and a blow to many homeowners whose monthly mortgage payments will now head higher.

Governor Mervyn King did indicate last month that he saw the inflation risks to the “upside” and that interest rates would have to go up at least once more. The Bank shocked the City by raising rates in January and lifted them again last month.

Just four of 62 economists surveyed by Bloomberg News predicted today’s increase. This year has proved a difficult one for Governor King after he was forced to write an unprecedented public letter of explanation to Chancellor Gordon Brown when inflation exceeded 3pc in March.

According to the latest set of forecasts published last month, the Bank warned that inflation would exceed its 2pc target in two years without another rise in rates.

Despite now lifting rates five times since last August, policy makers at the Bank are now faced with an economy that expanded at the fastest pace in three years in the first quarter and is enjoying the lowest level of unemployment for 18 months.

The increase comes as a survey today from the Halifax shows that interest rates are starting to have an impact on the market. Prices rose by 0.3pc in May, the smallest monthly gain this year, and the third time in a row that the monthly growth rate has slowed, according to the building society.

The increase will come as a significant blow to homeowners, many of whom have seen their mortgage payments climb in the past year.

DocProc

Whoah! Hang on a minute!

The Telegraph have also published this:-

From http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/07/bcnrates207.xml

Bank keeps interest rates at 5.5pc
By Richard Blackden
Last Updated: 11:34am BST 07/06/2007

The Bank of England kept interest rates at 5.5pc today but most City economists expect them to rise again by August.

The decision by the Monetary Policy Committee was predicted by all but four of 62 economists surveyed by financial news agency Bloomberg, which also found that the majority believed rates will go up again in August.

Despite lifting rates four times since last August, policy makers at the Bank are now faced with an economy that expanded at the fastest pace in three years in the first quarter and is enjoying the lowest level of unemployment for 18 months.

Governor Mervyn King did indicate last month that he saw the inflation risks to the “upside” and that interest rates would have to go up at least once more. The Bank shocked the City by raising rates in January and lifted them again last month.

This year has proved a difficult one for Governor King after he was forced to write an unprecedented public letter of explanation to Chancellor Gordon Brown when inflation exceeded 3pc in March.

According to the latest set of forecasts published last month, the Bank warned that inflation would exceed its 2pc target in two years without another rise in rates. However, today’s decision comes as the latest housing survey from the Halifax shows that interest rates are starting to have an impact on the market.

Prices edged up just 0.3pc in May, the smallest monthly gain this year, and the third time in a row that the monthly growth rate has slowed, according to the building society.

DocProc

So which is it to be? Just like 'Watergate', I think we need a confirmation on things.

Watch this space......