CPI Falls to 0.5%

Graham_Devon

ruggedtoast wrote: »

That was very creative Graham.

Well done.

Why thank you rugged.

Though if you click the link you'll find the text you read is the actual article.

The telegraph has gone full out mocking Mark Carney.

Thrugelmir

Jason74 wrote: »

How on earth does that work ?. Surely falling inflation puts downwards pressure on interest rates rather than upwards, or perhaps I'm missing something . . . . . . . . .

Oh yes, I am missing something. I'm missing the fact that HPC is at least in large part populated by lunatics.

Carney is still very clear that interest rates will rise. Seems the media is obsessed with deflation as well. Addicted to credit and inflation. Which simply allows the limp to struggle along for yet longer. Rather than clearing the deadwood and allowing new wood to flourish. The establishment rules.

Crashy_Time

Thrugelmir wrote: »

Carney is still very clear that interest rates will rise. Seems the media is obsessed with deflation as well. Addicted to credit and inflation. Which simply allows the limp to struggle along for yet longer. Rather than clearing the deadwood and allowing new wood to flourish. The establishment rules.

Deflation is like the shark in Jaws, or The Thing, it does not care about or comprehend the wishes of overleveraged journalists :rotfl:

tkane

Thrugelmir wrote: »

Carney is still very clear that interest rates will rise. Seems the media is obsessed with deflation as well. Addicted to credit and inflation. Which simply allows the limp to struggle along for yet longer. Rather than clearing the deadwood and allowing new wood to flourish. The establishment rules.

Carney said interest rates would go up when the economic recovery is locked in, he then said they would move up when unemployment falls. Basically, don't trust a word he says, it's all window dressing.

Thrugelmir

tkane wrote: »

Carney said interest rates would go up when the economic recovery is locked in, he then said they would move up when unemployment falls. Basically, don't trust a word he says, it's all window dressing.

If you listen to his speeches in full and not media soundbites. Then he's very straightforward and direct. Also consistent. It's the frenzy of consumer misunderstanding that amuses me.

Generali

Crashy_Time wrote: »

Deflation is like the shark in Jaws, or The Thing, it does not care about or comprehend the wishes of overleveraged journalists :rotfl:

Oil prices falling isn't deflation any more than oil prices rising is inflation.

Thrugelmir

Generali wrote: »

Oil prices falling isn't deflation any more than oil prices rising is inflation.

So from down under Gen. What's the view? Is it global growth that's slowing down under the accumulated debt burden.

Generali

Thrugelmir wrote: »

So from down under Gen. What's the view? Is it global growth that's slowing down under the accumulated debt burden.

There are lots of conflicting views really. I guess they can be distilled to:

-China slowing but no crisis.
-Fall in commodity demand as a result
-Falling AUD as a result of that
-Higher exports and reduced domestic consumption as a result of that fall in the AUD
-Bad news for WA but the boom couldn't last forever
-Good news for the Eastern States as exports rise, especially as the current Government is signing off on trade deals that have been in the pipeline for years. The AUD being high has generally been bad for the Eastern States.
-Hopefully a boom in housebuilding (Sydney especially is short of housing) will offset the drop off in mining. The initial signs are that this is happening.
-Overall a slow down in growth is inevitable. A recession will likely be avoided.
-Banks could be a problem due to their overexposure to mortgage lending.

That's the concensus view and probably not an unreasonable one. Sydney house prices bother me as they are really high by any standard and it would be simple to release more land for building. A change in the tax code or some sort of genuine subsidy on building on new land could put a lot of pressure on house prices. Plenty of investors are sitting on good profits that I suspect they are looking for an excuse to take.

wotsthat

Thrugelmir wrote: »

If you listen to his speeches in full and not media soundbites. Then he's very straightforward and direct. Also consistent. It's the frenzy of consumer misunderstanding that amuses me.

His/ BoE message about why interest rates will rise has been consistent. It's easy to be consistent - everyone knows why they may rise.

There's been much less consistency when talking about the timing of such a rise. I've spent far too much time listening to some of his forward guidance and taken actions accordingly - much of it has turned out to be a load of guff.

chucknorris

Generali wrote: »

There are lots of conflicting views really. I guess they can be distilled to:

-China slowing but no crisis.
-Fall in commodity demand as a result
-Falling AUD as a result of that
-Higher exports and reduced domestic consumption as a result of that fall in the AUD
-Bad news for WA but the boom couldn't last forever
-Good news for the Eastern States as exports rise, especially as the current Government is signing off on trade deals that have been in the pipeline for years. The AUD being high has generally been bad for the Eastern States.
-Hopefully a boom in housebuilding (Sydney especially is short of housing) will offset the drop off in mining. The initial signs are that this is happening.
-Overall a slow down in growth is inevitable. A recession will likely be avoided.
-Banks could be a problem due to their overexposure to mortgage lending.

That's the concensus view and probably not an unreasonable one. Sydney house prices bother me as they are really high by any standard and it would be simple to release more land for building. A change in the tax code or some sort of genuine subsidy on building on new land could put a lot of pressure on house prices. Plenty of investors are sitting on good profits that I suspect they are looking for an excuse to take.

I thought this explanation seemed to make sense, in which they are saying the current situation is good for the UK but not so good for mainland Europe:


http://www.cityam.com/207074/inflation-has-fallen-below-target-should-uk-be-worried


The Eurozone’s deflation is primarily the bad kind caused by weak spending. Spending in the UK has been stronger. Inflation in the UK is instead being driven down by oil prices which are diving due to a global supply glut.
“Low inflation driven by cheaper petrol, food and import costs is unambiguously a positive for the UK. It represents a big tax cut for consumers, who will be seeing real average earnings growth in excess of 1.5 per cent year-on-year within a couple of months,” said Rob Wood, economist at Berenberg investment bank.