Almost there! Unemployment hits 7.1%

pbouk

TheFactory wrote: »

No, why? Because I think house prices are going to rise?

What is your problem with my opinion?

No! it's because you think houses are "undervalued":rotfl:

coastline

MFW_ASAP wrote: »

In my experience, interest rates rise (AKA tightening monetary policy) because the economy is overheating/booming and the BoE/government want to cool things down. This certainly isn't the case at the moment.

So, can someone please explain why interest rates need to rise? I mean in purely economic terms not in forumnomics "because I think rates are too low" terms.

Interest rates were raised in the past in an attempt to head off inflation.This link was taken away in 2008 due to the world crisis .
As you can see from the chart base rates as a rough rule were around 2 points above inflation...so today we would be at inflation 2% and base rates 4% .
We ain't going to get 4% within a short period of time...at a guess this would take 3-4 years unless there was some other crisis.
The BOE have been taken by surprise so I'm guessing they will use another element to maintain 1/2% base rate.
If the USA lifts their rates then the UK will follow which is something that hasn't been mentioned yet..their economy is also doing ok...well it was until the latest job figures a few weeks ago.

http://i.dailymail.co.uk/i/pix/2011/07/07/article-2012193-0CE7882400000578-469_468x350.jpg

Thrugelmir

coastline wrote: »

If the USA lifts their rates then the UK will follow which is something that hasn't been mentioned yet..their economy is also doing ok...well it was until the latest job figures a few weeks ago.

The US has to grow its jobs every month. As the number of people joining the labour market is steadily increasing. There's no let up.

coastline

Thrugelmir wrote: »

The US has to grow its jobs every month. As the number of people joining the labour market is steadily increasing. There's no let up.

The latest figures came in at 50,000 jobs created...they are looking for a figure of around 150,000 for steady away.
The next set in 2 weeks time will be nervously awaited by the markets....keep an eye on it.

http://perspectives.pictet.com/wp-content/uploads/2014/01/USEmpl_10.01.2014-1.jpg

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

Funding for lending was withdrawn from mortgages once the lending markets recovered sufficiently.

Interest rates will rise when the economy has recovered sufficiently.

HTB will end when bank mortgage lending recovers sufficiently.

Graham_Devon wrote: »

What is "sufficient" though?

Only today you were posting that posters have "nothing left to post" thanks to all the positive indicators.

So what, in your view, is "sufficient" enough to enable the withdrawal of support and increasing of rates?

Apparently we could have growth close to 4% this year. Is that not "sufficient"? Growth in house prices could well be 10%+ if trends continue. Unemployment could well be below 6.5% by year end. Manufacturing is growing rapidly according to the surveys.

If those growth levels are not sufficient enough, then I dread to think what may be.

You, and others, are simply drowning yourselves in your own excitement over the positive figures.....yet when it comes to interest rates rising, you seem to hide behind a vague notion of sufficiency and everything being "not quite good enough...".

Absolutely Priceless! :rotfl:

Like many posters, Hamish uses his words carefully.

Here, he makes reasonable predictions, but in very vague terms [naughty Hamish!]. Using the word "sufficiently" without defining it in any way. If any rational person wanted to criticise Hamish, they would respond with something like "That's all very well to say that, but what do you mean by 'sufficient'?"

But in your usual muddling and aggressive way, you set out a very positive scenario [4% GDP, <6.5% Unemployment, 10%+ HPI] and assume - yes assume - that Hamish would not call this "sufficient". Hence you have a go at him! For something he hasn't said or even intimated!

Utter sophistry, muddling, and chip on the shoulder stuff if ever I saw it. I can only suggest you look for more concrete examples to argue or disagree with rather than making it all up. Surely there's some bad news somewhere if you look hard enough?

When did you stop beating your children?

Thrugelmir

Graham_Devon wrote: »

Your posts always seem to defend the BOE no matter what they say or do.

Because the world constantly changes every day. If you go sailing you have no control over the wind. You change course to adjust. So easy to criticise. Far harder to actually solve the problems we face.

The fact of the matter is that the BOE got it's employment forecast wrong. By around 2 years. However despite this there's little upward pressure on wages. Which in turn reduces the likelihood of upward inflationary pressures.

There's an increasing likelihood that areas of Europe will suffer a Japanese style deflationary period. This in turn will cap upward wage pressures particularly in the service sectors where jobs are easily transferable.

wotsthat

Graham_Devon wrote: »

Why say such things and make such a big thing about unemployment when annoucning forward guidance (again, this was not media, it was their own press conference) if 4 months later you are going to suggest it wasn't really what you said it was at all?

Forward guidance hinted that the BoE weren't minded to increase rates anytime soon. Nothing's changed.

Can't really see any big deals being made (apart from the media). Carney is probably delighted because it's strengthening the message that they don't want to raise rates at any cost thus influencing behaviour in the way they want.

Rates will rise when they're near certain that the positives outweigh the negatives. Whatever happens forward guidance seems sufficiently 'flexible' to cover most eventualities.

purch

coastline wrote: »

The next set in 2 weeks time will be nervously awaited by the markets....keep an eye on it.

The Non-Farm Payroll data has been nervously awaited by the markets, every month for 30 years or more.

The last time any release of this data was later proven to be anywhere near accurate after the 2 subsequent revisions was nearly 7 years ago IIRC.

The "markets" might get excited by the initial guesstimate when it is released, but the FOMC will be basing their decisions on far more relevant and accurate data.

MFW_ASAP

Graham_Devon wrote: »

It wasn't the media stating what he said though.

It was himself, using his own words.

Did you hear him state it with 'his own words'?

I keep asking you guys and no one wants to tell me why we would want to tighten monetary policy (raise interest rates) at a time of falling inflation and tentative recovery from recession. Do you want to have a go at explaining, Devon?

(please no trite "because interest rates are too low" nonsense).

MFW_ASAP

coastline wrote: »

Interest rates were raised in the past in an attempt to head off inflation.This link was taken away in 2008 due to the world crisis .
As you can see from the chart base rates as a rough rule were around 2 points above inflation...so today we would be at inflation 2% and base rates 4% .

So we're not raising rates because of high inflation (it's now in the BoE's range) and we're not raising them because of an overheating economy (far from it) and with using your chart, you seem to be using the rather trite "raise them because they are too low" argument.

That's no way to run an economy, surely? Make decisions based on dogma rather than sound financial reasoning?