Is the Bank of England monetary committee INCOMPETENT ?

ScoobyZ

Another freeze, I still think they are.

Inflation down, BUT will rise due to fuel prices.

Dollar at record low.

Banks starting to fear reposetions and tighter on lending.

Retail will be hit next.

I think they should of done a small drop today, but hey what do I know.

mystic_trev

Apart from fuel prices basic food prices are up 16% The latest Inflation figures are out next Tuesday. My guess CPI 2.10%

HugoSP

just watched CNN commentry that seems to think that the ECB (European Central Bank) would be likely to keep rates the same for the next few months and the BoE may be likely to keep rates or drop them slightly.

ECB rate app 4%
US app 4%??
BoE 5.75%

No wonder the £ is strong, soon we won't be able to export anything

Dan_Collins_2

ScoobyZ wrote: »

Another freeze, I still think they are.

Inflation down, BUT will rise due to fuel prices.

Dollar at record low.

Banks starting to fear reposetions and tighter on lending.

Retail will be hit next.

I think they should of done a small drop today, but hey what do I know.

They did the right thing today. They should never have let them go so low, thats the mistake, but then again they did not know that ppl would go out and borrow as much as they can because they can afford it. Borrowing is only one part of the subject, you have export, inport and other economics!

We need stability now, things have been hectic the last few months with mortgage lenders moving rates up and down and releasing new rates after bringing them out the week before.

I think we need to see out the year as we are. 5.75% as far as borrowing goes is fine. If it goes down it will come back up again, this breeds chaos and more confusion.

We now have issues with fuel and the US thing will be just a big an issue next year as it has this.

Dan_Collins_2

HugoSP wrote: »

just watched CNN commentry that seems to think that the ECB (European Central Bank) would be likely to keep rates the same for the next few months and the BoE may be likely to keep rates or drop them slightly.

ECB rate app 4%
US app 4%??
BoE 5.75%

No wonder the £ is strong, soon we won't be able to export anything

ECB do not have to worry about the same issues as what we have had over the last 4 months and the US cant push rates up anymore as they will have even more repo's. The US have a massive problem with whole streets being repo'd.

beingjdc

HugoSP wrote: »

ECB rate app 4%
US app 4%??
BoE 5.75%

No wonder the £ is strong, soon we won't be able to export anything

Bank of Australia: 6.75%
Bank of New Zealand: 8.25%

ManAtHome

HugoSP wrote: »

No wonder the £ is strong, soon we won't be able to export anything

Doing well against the dollar, but not so sparkling v the euro (was over 1.50 earlier this year). When/if other currencies drop their dollar peg there may be a few fireworks...

danm

Dan_Collins wrote: »

They did the right thing today. They should never have let them go so low, thats the mistake,

Why not?

The inflation target is just that, a target. If you are going to undershoot, you should make corrective action in just the same way that you would when indications show you are going to overshoot.

The borrowings that people made has kept the economy strong. Rates are still relatively low and in the opinion of many, have peaked.

whether people can aford the borrowing is another matter.

sarkin

The only people who suffer are the irisposible people who borrow to much money, then cant not afford to pay it back. Some people use thier house like a cash point that is the problem.

I think Merv does a good job but should never have made the .25% cut back in 2005, which is a good reason not to cut now as house prices will just go surging off again and this benefits no one except people that use their house as a caspoint machine.

HugoSP

I think that the way out of this mess is to reduce interest rates to make borrowing cheaper but put in controls to stop consumers borrowing irresponsibly.

It seems that the general public have created their own downfall through greed, encourage by advertising.

Remortgages for similar amounts would be easier to get than mortgages to buy, so people could maintain their homes at an affordable rate by remortgaging/switching to cheaper deals but buyers would be discouraged/prevented from overstreaching themselves.

In the same way, loans would have a specific purpose. A car loan would be provided partly on a needs analysis basis. So if you needed a car to get to work, fine, there would be a ceiling you could borrow depending on what your need is, rather than what repayments you could afford. If you want something better you have to bridge the difference, or convince the bank that you can safely service this loan and others besides it.

Credit cards would have limits set upon salaries and likely spend. When applying for a CC you would stipulate what you would use it for and how big your family is. They would then propose a credit limit and then you could discuss it with them. I have an £8000 limit on my cc. Quite frankly I don't need it. Occasionally it helps to put a deposit on a large purchase, like a car (as I get cashback) but I simply use it to buy time to drag money from accounts etc, so I don't spend money I don't have.

Applying the above would help the economy out without encouraging inflation etc.

You would find that people IMO would generally be happier as they won't have to work 25 hours a day to pay interest etc, fewer families would break up and in the long term a real sense of community would come back into the UK.