Carney indicates BOE likely to cut interest rates + possible Quantitative Easing

worldtraveller

UK business activity suffered its biggest fall ever, data from Markit showed this morning. The Business Activity Index fell to 47.4 in July, from 52.3 in June, signalling a fall in UK services output.

This was the first contraction since December 2012, and the rate of decline was the strongest since March 2009. Moreover, the month-on-month decline in the Index in the latest period, at 4.9 points, was the largest observed since the survey began in July 1996.

Chris Williamson, of Markit, said: "The PMI is already deep into territory which would normally spur the Bank of England into taking action to stimulate the economy. A quarter-point cut in interest rates therefore seems to be a foregone conclusion at tomorrow’s Monetary Policy Committee meeting, though the extent and nature of other non-standard stimulus measures remains a far greater source of uncertainty and the subject of intense speculation.”

The Telegraph

westernpromise

an ex(?) Goldman Sachs employee, presumably doing the bidding of the global financial elites

Why do you presume that?

MARTYM8`

worldtraveller wrote: »

UK business activity suffered its biggest fall ever, data from Markit showed this morning. The Business Activity Index fell to 47.4 in July, from 52.3 in June, signalling a fall in UK services output.

This was the first contraction since December 2012, and the rate of decline was the strongest since March 2009. Moreover, the month-on-month decline in the Index in the latest period, at 4.9 points, was the largest observed since the survey began in July 1996.

Chris Williamson, of Markit, said: "The PMI is already deep into territory which would normally spur the Bank of England into taking action to stimulate the economy. A quarter-point cut in interest rates therefore seems to be a foregone conclusion at tomorrow’s Monetary Policy Committee meeting, though the extent and nature of other non-standard stimulus measures remains a far greater source of uncertainty and the subject of intense speculation.”

The Telegraph

The dramatic fall in sterling would equally make the case for a rise.

Do we really think a 0.25% base rate cut will really make any difference given how low rates already are - how many businesses will now have to pay their banks to hold their money if rates are close to zero?

Has Mark Carney ever actually raised interest rates? He played the same game in Canada. If you want to create housing bubbles and price your kids out of buying a home he is perfect.

https://www.mises.ca/carney-ready-to-raise-interest-rates-soon/

michaels

The Bo#E has already demonstrated that it is not worried about inflation accused by external commodity price rises and only cares about inflation driven by domestic cost pressures - quite right in my opinion. Some on here would like to see interest rates increased during a deep recession if it coincided with imported global commodity price increases

CLAPTON

MARTYM8` wrote: »

The dramatic fall in sterling would equally make the case for a rise.

Do we really think a 0.25% base rate cut will really make any difference given how low rates already are - how many businesses will now have to pay their banks to hold their money if rates are close to zero?

Has Mark Carney ever actually raised interest rates? He played the same game in Canada. If you want to create housing bubbles and price your kids out of buying a home he is perfect.

https://www.mises.ca/carney-ready-to-raise-interest-rates-soon/

the fall in sterling is essential and to be welcomed: no way that interest rate will rise to 'support' sterling.

the London/SE housing situation is mainly due to the population increase due to immigration.

Thrugelmir

michaels wrote: »

The Bo#E has already demonstrated that it is not worried about inflation accused by external commodity price rises and only cares about inflation driven by domestic cost pressures - quite right in my opinion. Some on here would like to see interest rates increased during a deep recession if it coincided with imported global commodity price increases

Not chance of wage inflation. With the global deflation of labour costs feeding through.

Jonbvn

Well it looks very likely that the interest rate on our tracker mortgage will go from very low to ridiculous tomorrow.

Mark, if you carry on, the bank will start paying us soon! Not sure what happens in that case - will have to check T&C's.

Thrugelmir

Jonbvn wrote: »

Well it looks very likely that the interest rate on our tracker mortgage will go from very low to ridiculous tomorrow.

No collar?

lisyloo

Thrugelmir wrote: »

No collar?

I don't have a collar (first direct), but I thought it was generally agreed (in the press) that it was never the intention of the mortgage contract that banks pay the borrower.
This is a little bit at odds with the situation where companies pay banks to look after their cash.

I'm not cheering a minuscule mortgage and think that would be very short sighted.

mwpt

Graham_Devon wrote: »

Those on the remain side have been wrong so far about nearly every economic consequence of the vote. For example, house prices are up this month according to Nationwide - so theres a big dance from Nationwide about how these figures should not be relied upon etc etc as they had warned (like you) house prices would be damaged by the vote alone. They need to be right about something - so they will create issues.

That is the view of a loony.

Also, there are many on the remain side (me for example) who said if there is sign of troubles which also may impact the housing market, this would be short lived because the government would stimulate "growth" through lower rates and QE. So no, not everyone said house prices would fall.