Bank of England shocks markets with close vote on rate hike

michaels

I still think we are heading towards recession rather than inflation with current interest rates and any rise would just make it quicker and deeper...and be quickly reversed.

Thrugelmir

michaels wrote: »

I still think we are heading towards recession rather than inflation with current interest rates and any rise would just make it quicker and deeper...and be quickly reversed.

Recession is when some else loses their job. A depression is when you lose yours.

The correction was never going to be painless.

Koldweather1

I think as someone said on the radio yesterday they need to up interest rates to some extent if only then to be able to drop them down again if recession does kick in (probably caused by some form of Brexit shock I'd wager).

With that being said I'm doubting anything too significant, frankly the country as a whole has too much debt. Raising it too fast would be like shooting a gun at your face to remove a tooth and would probably cause recession in its own right due to the collapse of businesses and probably many mortgage defaults (as many have become very reliant on ultra low interest rates).

Thrugelmir

Koldweather1 wrote: »

probably many mortgage defaults

When push comes to shove. There'll be plenty of expenditure that people can back on. Phones, Sky and Broadband spring to mind. Followed by eating out.

Koldweather1

Thrugelmir wrote: »

When push comes to shove. There'll be plenty of expenditure that people can back on. Phones, Sky and Broadband spring to mind. Followed by eating out.

By cutting most of those things your probably still going to cause some sort of growth degrade, at a time when the economy can't really afford for that to happen. At worst that in itself could tip many business who life near the edge over that said edge and spark some small recession, regardless of macro problems.

I think a 0.25 increase is nailed on sooner rather than later, there was never really enough to justify dropping it in the first place (a panic drop maybe) . I can see a gradual increase to maybe 1.25-1.5 then a stabalisation unless the whole thing goes pop.

sevenhills

Koldweather1 wrote: »

I think a 0.25 increase is nailed on sooner rather than later, there was never really enough to justify dropping it in the first place (a panic drop maybe) . I can see a gradual increase to maybe 1.25-1.5 then a stabalisation unless the whole thing goes pop.

And beyond as year or so, we just dont know, with the price of houses, its unlikely to rise much further. But we dont know.

Thrugelmir

Koldweather1 wrote: »

By cutting most of those things your probably still going to cause some sort of growth degrade, at a time when the economy can't really afford for that to happen.

While cancelling / reducing Sky subscriptions reduces growth. The overall impact on the overall economy is low. As Sky only spend money on buying overpriced rights to Sports events. Most of the money leaves the UK economy ultimately. Likewise people will still food. From not eating out activity will simply transfer elsewhere. Growth is something which needs to put into a far wider perspective.