Bank of England rates could rise more than thought

westernpromise

Thrugelmir wrote: »

Why would you see a problem. You don't have the resources the BOE has at it's disposal. The BOE employs around 4,000 people. Not a one man and his dog operation. Who sit round and have a chat once a month. BOE makes changes to influence the future, i.e. smooth out the bumps.

The BoE's remit is narrow, however.

westernpromise

The MPC's remit is to contain inflation so unless there's some input to that which we can't see, for some reason, they're unlikely to surprise us.

Filo25

westernpromise wrote: »

The MPC's remit is to contain inflation so unless there's some input to that which we can't see, for some reason, they're unlikely to surprise us.

If they do increase in May it will primarily be due to wage inflation combined with a Labour market that looks tight on the headline numbers, and I suppose further weakness in Sterling and strength in oil prices may influence things, but there is a fair bit of data also pointing in the other direction.

westernpromise

Right, those would be the sort of factors they'd look at; and as you say, there are data poitning both ways - nothing in there looks like we are in unavoidable need of a rate rise.

The fact that sterling has returned to its pre-Brexit-vote level must be a fairly important factor among those they consider. Devaluation is inflationary, usually, so if the £ is recovering that's pretty helpful.

GreatApe

I dont see any inflation in the system

The low base rate encourages low inflation the BOE could keep base rates at 0.5% for the next 20 years and there would be no more than 3% averaged inflation. For all the hate some people have for the BOE it has done a good job over the decade inflation has been 2.8% perfectly within its 2-3% remit.

The only thing that needs changing is to go from a running 1 year inflation target to maybe a 3 year target. Else you get hiccups like in the last decade where we have had negative inflation and almost 5% inflation in both cases people can panic but the decade long trend has been perfect

Graham_Devon

ilovehouses wrote: »

Carney must wish he'd kept his mouth shut..

https://www.theguardian.com/business/2018/feb/05/uk-services-sector-growth-falls-hotels-restaurants-brexit

Just a point on that article.

How on earth is "brexit" stopping people going to eat in a restaurant!?! It's in the title of the article (no mention in the body of the article) and then the comments are full of "fault of people who voted brexit".

is there anything that isn't the fault of brexit?! Clearly the increases in all sectors over the past 2 years since the vote hasn't been the fault of brexit....just any decrease.

There's been a surprise increase in car sales - story on the Guardian - notice that not the fault of brexit....

Sorry, but really aggravates me!

veryintrigued

Bumping this thread up for the decision later today.

HPC_Ghuol_Hunter

This thread is pure baseless fear mongering. Best closed.

lisyloo

HPC_Ghuol_Hunter wrote: »

This thread is pure baseless fear mongering. Best closed.

It's not fear mongering, it's discussion.
There was an expectation of a May rate rise earlier in the year.
I chose to take some action (relatively insignificant in my case), but I took a view based on discussion here and of course elsewhere.
This made my situation SAFER and was a considered one and not a knee-jerk reaction. I am glad I took the more certain route even though I might make less profit as a result.
Another example is some people take fixed rates. They might pay a little more but have some peae of mind.

The situation has changed since then but people who pay a slightly higher price for peace of mind accept that it might be less optimum mathematically.

I see no scaremongering and we should be able to free debate rates as it could have an impact on the housing market in particular and the economy in general. You are of course free not to participate, but can't dictate that threads are closed when others wish to discuss.

fewcloudy

lisyloo wrote: »

It's not fear mongering, it's discussion.
There was an expectation of a May rate rise earlier in the year.
I chose to take some action (relatively insignificant in my case), but I took a view based on discussion here and of course elsewhere.
This made my situation SAFER and was a considered one and not a knee-jerk reaction. I am glad I took the more certain route even though I might make less profit as a result.
Another example is some people take fixed rates. They might pay a little more but have some peae of mind.

The situation has changed since then but people who pay a slightly higher price for peace of mind accept that it might be less optimum mathematically.

I see no scaremongering and we should be able to free debate rates as it could have an impact on the housing market in particular and the economy in general. You are of course free not to participate, but can't dictate that threads are closed when others wish to discuss.

I shudder to think of the decisions some have taken over last 10 years based upon rumours of impending rate rises.