Bank of England shocks markets with close vote on rate hike

dori2o

michaels wrote: »

http://www.bbc.co.uk/news/business-40354879



Elephant in the room - how come with such low UK unemployment have we snot seen wage rises, surely nothing to do with the 10m plus unemployed english speakers in europe who are free to work here.

Haldene knows this hence his expectation that the slowing and reversal of this migrant flow may lead to wage increases but he is too politically correct to say so. Must be thinking of his next job with a hig firm that benefits frombeing able to source labour from anywhere in the eu rather than having to pay more for uk talent. :mad:

Whilst unemployment is at very low levels we're still a long way from full employment.

There's still over 3M out of work due to ill health and disability which is higher than 2010, plus almost 9M who are inactive but not claiming which is almost 1M more than in 2010

Whilst unemployment is low, you have to look at what kind of jobs people have.

In 2010 less than 200,000 were on zero hours contracts, now there's more than 910,000.

There's more people in part time only work compared to 2010.

There's fewer people in full time work and this figure is falling.

Underemployment is around 3 - 3.5M, higher than 2010.

Average salaries are lower than they were in 2007/08.

5M people are subject to an average 1% payrise whilst inflation is over 2.7%, therefore the equivalent of a pay cut. (Whilst elsewhere average payrises are around 2.3%).

Theres over a Million more self employed but the vast majority are earning less than the national average, and a significant proportion are earning profits less than the NLW.

So whilst the politically minded on the right will tell you unemployment is the lowest since records began, itdoesn't tell the whole story, which is hardly one where everything is rosey in the garden. Quite the opposite in fact.

Raising interest rates will damage far more people than it will benefit, and whilst that is the case they simply cannot be increased significantly.

If they were to it would lead to significant numbers of hardship, reposessions, defaults on loans, credit cards, mortgages, and not only for individuals, but for many of the small businesses that the Government has been encouraging for the last 7 years.

AG47

worldtraveller wrote: »

The time is not right for an interest rate rise, Bank of England governor Mark Carney has said.

In his Mansion House speech, Mr Carney said: "From my perspective, given the mixed signals on consumer spending and business investment, and given the still subdued domestic inflationary pressures, in particular anaemic wage growth, now is not yet the time to begin that adjustment [rate rises].

BBC News

We are still in crisis mode, things have got worse since 2008, IRS can only go back up if the crisis is over, and it won't be until the fiat system collapses

qwert_yuiop

AG47 wrote: »

We are still in crisis mode, things have got worse since 2008, IRS can only go back up if the crisis is over, and it won't be until the fiat system collapses

Yoicks. You're a cheery one.

Thrugelmir

dori2o wrote: »

So whilst the politically minded on the right will tell you unemployment is the lowest since records began, itdoesn't tell the whole story, which is hardly one where everything is rosey in the garden. Quite the opposite in fact.

Whether it's rosey or not depends on which side of the fence you are sitting. The fact that Carney made the statement after the publication of the 6 monthly Financial Stability Report is a clear indication of the concerns that the BOE has. Not for borrowers, but the conduct of lenders. As it appears it is they that are stoking the fire to a significant extent. The ability of lenders to weather another financial downturn is of greater concern. Of course by tightening the screw on lenders. This might then start to trickle through to borrowers themselves, availability of credit etc. For new car finance etc. The BOE might reverse last years Brexit base rate cut to provide themselves with some more ammunition as well. The course of action will be slow. If they follow the Fed's lead. Would take several decades to reverse the policies of the past 10 years.

sevenhills

I am in the process of applying for a 10 year fixed mortgage with the Coventry; just looked on the compare page and it has vanished.
I assume they have got cold feet because of the talk about increasing rates.
The mortgage was 2.69% there are still others from the Coventry, but costing more in total. I don't suppose they will honour my application?
There is one with a lower 2.49% but the costs are £999 more.

Thrugelmir

sevenhills wrote: »

I assume they have got cold feet because of the talk about increasing rates.

More likely that they have been impacted by the requirement to hold more capital on their balance sheet. Therefore need to reprice their lending rates. Coventry have been one of the more aggressive lenders recently.

Without raising base rate. The BOE has been able to impact certain segments of the lending markets. As these targeted lenders raise their rates. Others will follow, as no longer any need to offer such competitive rates. More than one way of skinning a cat.

worldtraveller

Bank of England official Ian McCafferty stuck to his view that interest rates should rise now in a newspaper interview published on Tuesday, saying that the economy has not slowed by as much as predicted.

"I feel on the balance of monetary policy that there is a need for change," McCafferty told the Daily Post newspaper during a visit to Wales.

"I think this would be justified and would be the prudent thing to do at this stage."

McCafferty was one of three members of the eight-strong Monetary Policy Committee who voted last month to raise interest rates from their record low 0.25 percent.

Reuters

sevenhills

sevenhills wrote: »

I am in the process of applying for a 10 year fixed mortgage with the Coventry; just looked on the compare page and it has vanished.

I have just received my mortgage offer from the Coventry, well pleased. A 10 year fixed 2.69%, APRC @ 2.7%
I believe this mortgage was removed a few days ago, they no longer offer it. The fees are only £8; the one on their web site is 3.2% APRC, includes fees of £1007

Just waiting for a tax refund, then I hope to sign on the dotted line.

Thrugelmir

sevenhills wrote: »

I have just received my mortgage offer from the Coventry, well pleased. A 10 year fixed 2.69%, APRC @ 2.7%

Hope you've no intention of moving any time soon.

sevenhills

Thrugelmir wrote: »

Hope you've no intention of moving any time soon.

Its a right to buy, staying put.