BOE could launch further QE in order to keep rates low

CLAPTON

Thrugelmir wrote: »

Wholesale money markets operate independently of the central banks.

Deposits will chase the best low risk high rate.

I doubt that wholesale money markets are uninfluenced by the quantity and price of money provided by the central banks

chucky

undetterred wrote: »

The OP will never be able to buy the other half of the house if IR's go up.

There is seems to be a direct correlation with an increase in bad news posts on this forum and rising house prices.

Loughton_Monkey

chucky wrote: »

There is seems to be a direct correlation with an increase in bad news posts on this forum and rising house prices.

We're all doomed....
House prices are at the top of a huge bubble...
The next recession is around the corner....
The younger generation cannot get on the housing ladder...
Children cost > child benefit/child tax credits. Hence abject poverty...
Insurrection in Egypt will result in global meltdown....
David Cameron has got a 'bad back....



There!

That should do for another 5% on house prices.

.. large gin & tonics all round...

Thrugelmir

CLAPTON wrote: »

I doubt that wholesale money markets are uninfluenced by the quantity and price of money provided by the central banks

Despite the injection of £375 billion of QE. Broad money supply M4 has contracted since 2007. In simple terms there is less money in circulation. As banks continue to contract their balance sheets the squeeze will continue.

chucky

CLAPTON wrote: »

I doubt that wholesale money markets are uninfluenced by the quantity and price of money provided by the central banks

If QE hadn't taken place the economy/money markets would have been in a much dire place than it is now so QE does influence the money markets. Whoever says they don't is a fool.

ManAtHome

CLAPTON wrote: »

I doubt that wholesale money markets are uninfluenced by the quantity and price of money provided by the central banks

Maybe not, but it (eg Funding for Banksta Bonuses) does allow banks to reduce their reliance on 'real' money.

Thrugelmir

ManAtHome wrote: »

Maybe not, but it (eg Funding for Banksta Bonuses) does allow banks to reduce their reliance on 'real' money.

Barclays are contracting their balance sheet by £85 billion as part of the recapitalisation exercise. Lloyds, RBS, Nationwide and Co-Op are no doubt following suit. The BOE is providing the smokescreen for an orderly withdrawl.

ManAtHome

Thrugelmir wrote: »

Barclays are contracting their balance sheet by £85 billion as part of the recapitalisation exercise. Lloyds, RBS, Nationwide and Co-Op are no doubt following suit. The BOE is providing the smokescreen for an orderly withdrawl.

As and when forced - this crap has been going on for quite a few years now.

thor

wotsthat wrote: »

The BoE have an inflation target. Maybe they're worried about the increased risk of deflation associated with rising rates and a still fragile economy.

Do they still? After years of failing to hit 2% I think Carney has made it clear they are not even bothering about inflation(or were ever) as they are clearly not able to deliver on their duties. Going by their past record I see them screwing up whatever their new objectives are too.