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BOE MPC - Interest Rates remain at 0.5%

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  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Generali wrote: »
    UK services PMI is now up to 56. The manufacturing PMI is down but services make up the bigger part of the economy by a long way.

    UK economy still highly reliant of consumers spending their wages and accumulating debt. Not a healthy scenario in the longer term.
  • Generali
    Generali Posts: 36,411 Forumite
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    Thrugelmir wrote: »
    UK economy still highly reliant of consumers spending their wages and accumulating debt. Not a healthy scenario in the longer term.

    Currently the savings rate (proportion of earnings saved) is 4.7% which is well within the normal range of 4-8%:

    http://www.tradingeconomics.com/united-kingdom/personal-savings

    It's a myth that the UK economy relies on people blowing all their wages and more on a load of tat. It's just not the case; it's forumnomics.

    Lest we forget, and as I have said before, the whole point of an economy is consumption. You don't build cars, grow food, brew beer or make videos of cats falling over unless someone is going to consume them. The economy is consumption.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    edited 12 December 2015 at 9:42AM
    Generali wrote: »
    Currently the savings rate (proportion of earnings saved) is 4.7% which is well within the normal range of 4-8%:

    http://www.tradingeconomics.com/united-kingdom/personal-savings

    It's a myth that the UK economy relies on people blowing all their wages and more on a load of tat. It's just not the case; it's forumnomics.

    Lest we forget, and as I have said before, the whole point of an economy is consumption. You don't build cars, grow food, brew beer or make videos of cats falling over unless someone is going to consume them. The economy is consumption.


    The savings ratio prior to the early 90's was above 8%. People now complain that the baby boomers are wealthy.

    What are the implications of a long term trade deficit?
  • Generali
    Generali Posts: 36,411 Forumite
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    Thrugelmir wrote: »
    The savings ratio prior to the early 90's was above 8%. People now complain that the baby boomers are wealthy.

    What are the implications of a long term trade deficit?

    The savings ratio in 1958 was -0.8%. The current savings ratio is well within the normal range of the last 60 years.

    Implications of a long term trade deficit is that you either need to consume less from abroad or sell more to foreigners. The implications of a trade surplus are a lot worse as Northerners found out in the 1920s & 30s when the trade surplus had to go. I know we are taught to fetishise a trade surplus but in reality it's no better than a trade deficit.

    I wish ill on nobody but it will be quite amusing to see what happens to those Germans who are super smug about their surplus when they find out it's unsustainable, that their savings from the surplus have nil value because they're claims against assets that they will never get.
  • Graham_Devon
    Graham_Devon Posts: 58,560 Forumite
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    Heard an interesting snippet today. Not sure if I heard it 100% correctly, but apparently there is only 1 rate setter left at the BOE who has had any experience of increasing interest rates.

    The others have never done it - or indeed voted for it in many cases.
  • wymondham
    wymondham Posts: 6,356 Forumite
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    Heard an interesting snippet today. Not sure if I heard it 100% correctly, but apparently there is only 1 rate setter left at the BOE who has had any experience of increasing interest rates.

    The others have never done it - or indeed voted for it in many cases.

    so its true then, they don't know what they are supposed to do when they meet each week other than catch up with how the twins are doing in playgroup?
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    Heard an interesting snippet today. Not sure if I heard it 100% correctly, but apparently there is only 1 rate setter left at the BOE who has had any experience of increasing interest rates.

    The others have never done it - or indeed voted for it in many cases.

    They're all old enough to have experienced rate rises but none of the current members were on the MPC last time they went up.

    The longest serving member is Martin Weale who joined in 2010.
  • peter3hg
    peter3hg Posts: 372 Forumite
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    Heard an interesting snippet today. Not sure if I heard it 100% correctly, but apparently there is only 1 rate setter left at the BOE who has had any experience of increasing interest rates.

    The others have never done it - or indeed voted for it in many cases.

    The external members can serve a maximum of two consecutive three year terms so by definition none of those can have been there the last time interest rates were changed.
    One finished his term in August and the only way he ever voted was to keep interest rates at 0.5%
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Generali wrote: »
    The savings ratio in 1958 was -0.8%. The current savings ratio is well within the normal range of the last 60 years.

    Not sure what point you are trying to make. Food rationing didn't even end until 1958. You make it sound as if the war didn't even happen. ;)
  • worldtraveller
    worldtraveller Posts: 14,013 Forumite
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    edited 23 December 2015 at 11:43AM
    The UK's growth in the third quarter has been revised to 0.4% - down from the 0.5% previous estimate, according to the ONS.

    The new lower assessment of growth has been blamed on weaker growth in the services sector, especially in financial services.

    It means that in annual terms, growth has been revised down to 2.1% from a previous reading of 2.3%, something that will surprise many, including the Bank of England as it ponders whether to raise interest rates.

    Economists taking part in a recent Reuters poll had expected no change to the GDP estimates for the July to September period.

    Sky News

    ONS
    There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
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