Should Mark Carney Shut Up?

Jon_B_2

I do not profess to be an expert in economics, but IMO the BOE have completely lost the plot re: interest rates.

Carney was meant to herald a new era of "forward guidance" and all he has done is stir up uncertainty. I'm a homeowner and even I think it is ridiculous that interest rates are still 0.5%. We are in a new world, the longer we err on the side of caution with regards to rising rates, the bigger the impact when it finally does happen.

Not only that, but indirectly they are playing fire with people's finances. How are we as poor minions getting on with our lives supposed to plan ahead when one day we get told one thing, yet the next day something else is on the agenda.

I fixed my mortgage for 5 years last year, so I am going to "lose" and now with the can kicked further on interest rates I will no doubt be looking at exchange rates of closer to £1.20 to the euro for my holiday to France later this year.

I may be naïve, but since when did world events impact our interest rates so much?

Also inflation is only 0.2%, but in my mind interest rates are a decent mechanism to control house price inflation, again as a homeowner it is ridiculous my house is supposed to have risen by 7.3% in the first year of ownership

It seems like a bit of rant, so I apologise - in fact apparently as a homeowner I have it too good - low interest rates and decent HPI, but my moral conscience knows that if this continues there is an entire generation of people my age who won't know what "normal" interest rates look like and i'm sure not all will have made the financial consideration in terms of mortgage payments with higher rates.

Carl31

thing is, using the measures of inflation we currently do, there is no reason to raise rates

You could argue that the measures being used are out of touch, or incorrect, but thats what they use, until they decide otherwise. One of the main problems is HPI is ignored, which is where all the inflation is being channeled. So there is inflation, just not the right inflation

Of course, all the while there is no inflation, this means that demand is subdued, or prices are low, both potential indicators of problems elsewhere

simple fact is the country isn't stable enough financially

bulldo

What you should know is that Carney won't ever be able to raise interest rates. It's not in his interest to do so,nor is it in the government's, nor the banks. I would advise everyone to start to watch alternative media outlets so they can get another view other than the mainstream propaganda channels and then be able to work out what is probably really going on. Suggest keiser report and boom bust on rtuk channel, king world news on internet, Reggie Middleton, Steve Jean etc

Mistermeaner

I would have upped them but I get paid for doing other stuff so what I think doesn't matter

Jon_B_2

Mistermeaner wrote: »

I would have upped them but I get paid for doing other stuff so what I think doesn't matter

I understand the point you are trying to make there, however if his job is to give us some guidance in order for us to make informed judgements, then we have a right to reply.

If that's not his intention, he probably shouldn't address his thoughts to the media.

lawriejones1

The pound against the Euro is going to fluctuate before the summer. Not sure when you're off on holiday, but I wouldn't worry yourself too much about it just yet.

lisyloo

Yes I think they should stop giving forward guidance.
On the last bit mmr brought in April 2014 has ensured that future rises should be taken care of. The number of liar loans and the amount of irresponsible lending should now be quite low.
Of course in some areas house prices haven't moved but overall I'm saying the problem has lessened.

kinger101

You chose to fix because you wanted the security of knowing what your repayments would be for the next five years. Nothing has changed. Stop complaining.

Thrugelmir

lisyloo wrote: »

Yes I think they should stop giving forward guidance.

For those running a business. Forward guidance is extremely useful. Better than not knowing what was going to happen one month to the next. Means that medium term planning can be made with certainty.

bugslet

Jon_B wrote: »

I fixed my mortgage for 5 years last year, so I am going to "lose" and now with the can kicked further on interest rates I will no doubt be looking at exchange rates of closer to £1.20 to the euro for my holiday to France later this year.

.

I debated should I fix my mortgage a while back, but decided things didn't look as if they were going to change. I might well have been wrong, but only myself to blame. I don't listen to Carney and decide what will happen - looking back at the pronouncements those in the know make, they don't seem to get it right or wrong any more than I do. Maybe that's an age thing.

Thrugelmir wrote: »

For those running a business. Forward guidance is extremely useful. Better than not knowing what was going to happen one month to the next. Means that medium term planning can be made with certainty.

I suspect Thrugelmir that you are talking big business, certainly as a small business of 22 employees, we take no notice of forward guidance, mostly because to me it's just a 'this is what I think will happen', it's not cast in stone. If it was, I'd listen. Rates will go up at some point, to me this doens't feel like the time just yet.

Generali

Thrugelmir wrote: »

For those running a business. Forward guidance is extremely useful. Better than not knowing what was going to happen one month to the next. Means that medium term planning can be made with certainty.

Forward guidance is meant for the markets.

Central banks and investment banks are waaaay too intertwined IMO. Central banks should tell investment bankers to do one IMHO.

Investment banking is a declining industry rather as steel and coal were 30 or 50 years ago. The bodies of the state shouldn't prop them up any more than Mr Corbyn's 'idea' of reopening coal mines is a good idea.