BoE Interest Rate - No Change

Liz_the_Whizz

As widely expected, BoE rates remain at 5.75%:

http://news.bbc.co.uk/1/hi/business/7027543.stm

And CBI economic adviser quoted as saying that next move is definitely down, just a question of when.

FTB time?

dougs

it was 8 to 1 to hold, and no prizes for guessing who voted to drop! :rolleyes:

http://news.bbc.co.uk/1/hi/business/7048420.stm

is that man always out of step with everyone else......(rhetorical question )

free4440273

as far as BofE are concerned inflation is 'subdued' (CPI still at 1.8%), so a .25, perhaps even .50 rate cut in november. Looks like the Fed might cut again also by .25. So, we can expect a market rally in the run up to Xmas...

Aegis

free4440273 wrote: »

as far as BofE are concerned inflation is 'subdued' (CPI still at 1.8%), so a .25, perhaps even .50 rate cut in november. Looks like the Fed might cut again also by .25. So, we can expect a market rally in the run up to Xmas...

I doubt that the MPC would consider a 0.5% cut in a single month... If the inflation rate continues to hold, we might be lucky and see 0.25% before the end of the year and another 0.25% early next year, but the general strategy of the current committee seems to be "wait and see" before making small changes. Quite a sensible strategy overall.

purch

I doubt that the MPC would consider a 0.5% cut in a single month..

All this 1/4 pct nonsense is just another of Greenspans 'great' ideas !!!!

Bring back the days of 1/2 pct movements........:rotfl: much more fun.

Greenspan didn't have much of a clue :eek: about most things......this included !!!!!!!

free4440273

Originally Posted by free4440273
as far as BofE are concerned inflation is 'subdued' (CPI still at 1.8%), so a .25, perhaps even .50 rate cut in november. Looks like the Fed might cut again also by .25. So, we can expect a market rally in the run up to Xmas...

Aegis wrote: »

I doubt that the MPC would consider a 0.5% cut in a single month... If the inflation rate continues to hold, we might be lucky and see 0.25% before the end of the year and another 0.25% early next year, but the general strategy of the current committee seems to be "wait and see" before making small changes. Quite a sensible strategy overall.

I don't really much believe what the BofE say: they say CPI is 1.8%:rotfl:


http://business.timesonline.co.uk/tol/business/economics/article2676733.ece

ollyk

Liz_the_Whizz wrote: »

FTB time?

Why is it FTB time?

Milarky

"It was possible that a cut in rates this month could be misinterpreted as a signal that monetary policy was focused on supporting the financial system and not on meeting the inflation target."

I wouldn't read these comments too closely but if you think about it they definitely are sending mixed signals here. How can one month make all the difference just because a few reports are coming out (probably containing ambitious date at best as they are provisional and subject to constant revision)? They clearly have 'no steer' on whether to cut rates or leave them alone (to do the 'work' they are supposed to in cooling inflation on the the Government's chosen measure of CPI) so they vote '8-1' for no change. The real news is that the markets and unnamed experts believe that a cut in November is a done deal - that the MPC will - in other words cut interest rates out of expediency (that word means 'quickly' in some senses.)

They are trying to have it all ways. Not appear as if they are doing the markets' bidding - yet implying they could cut rates in November if one set of dodgy data backs up their belief that inflation is 'on target'. If I were them I would leave it to the Spring and then start cutting. Remember that rates only got to 5.75% in August. If we were at a turning point they should stay where they are for at least 9 months to a year. And there can't be much scope for lowering rates below 5% anyway they are still at historically low levels and all we've seen since 2003 is a single cut (from 4.75% to 4.50%) which itself should never have been made given the revival in the housing market which followed. The MPC has been engaged on raising rates gradually for four years during a time when inflationary pressures were much less than they are today. So what scope is there really for lowering rates except at a time when rates are being forced down around the world artificially by the US's attempts to avert recession?

By 2010 interest rates could be around 7% in the UK - unless (God forbid!) we join the Euro and can bask in their lower rates set by the ECB. The only trouble with that idea of course is that we probably could not join for political reasons much earlier than 2014 even if we wanted to. Big mistake of historic proportions not joining as soon as possible when Labour were elected. One man stood against it - I think we know who he was.

purch

By 2010 interest rates could be around 7% in the UK - unless (God forbid!) we join the Euro and can bask in their lower rates set by the ECB

Of course, if we WERE in the Inflexible Euro straightjacket, the E.C.B. would have to factor, the U.K.'s out of wack :eek: and totally bonkers :cool: economy into their Interest rate decisions, which might lead to a few 'headaches' for the Eurocrats

Lokolo

And don't they have to consider other countrys as well as us?

Just wondering, after xmas, with lots of people spending money over the xmas period, will IR not go down then? (I assume a lot less people will be spending after this)

Moorepart

Lokolo wrote: »

And don't they have to consider other countrys as well as us?

Just wondering, after xmas, with lots of people spending money over the xmas period, will IR not go down then? (I assume a lot less people will be spending after this)

Bring on the rate cuts. The larger and more often, the sooner this ridiculous farce of an economy will come crashing down. Put the b@stard out of its misery.:rolleyes: