Are we expecting BOE to remain at 4.75% on 8th February 2025?

lojo1000

Promises, promises. Get yourself down to your favourite mortgage bank.



...but a June cut ain't happening.

...and unless this employment market slows and commodities stop rising then there is no need to cut rates.

BarelySentientAI

Anyone have a recent swap rates chart to see where the recent/imminent mortgage rate cuts have come from?

lojo1000

Although inflation came down today, albeit less than expected, it should not be a signal to cut rates. FX and bonds think the same. 

Rate cuts SHOULD NOT BE COMING any time soon.





And why not?.........



There is absolutely no need to cut rates. Employment is strong, real wages are strong.

Why would a central bank cut rates with this economic backdrop after inflation over the last few years has taken away 25% of your spending power????

Political pressure? To look like they've done a good job?

Why not let inflation continue to fall? What is wrong with general inflation below 2%??? Technology is one of the most innovative industries and continually finds ways to be more productive (better products) whilst holding prices low or even reducing prices. Does that stifle innovation and capital investment?

I do not believe prices need to rise 2% per annum to incentivise business to turn up to work each day. That is another b*llshit line which gets trotted out by media/central bankers/politicians and even economic academics (who haven't shown any innovation for 100 years.)

The chart above shows the issue. Cutting CB rates and hence mortgage rates when employment and hence demand is strong leads to speculation and excess demand in housing. This leads to strong asset wealth growth and hence consumer confidence (over and above what is warranted from employment) and soon enough once again rates need to put up again. What a merry-go-round.

It's an absolute joke of an economic system focused on the near future, run by self-interested politicians (including CBs) who are able to keep a straight face whilst talking to the uneducated media.

Our friend Mr. Lewis needs to expand his horizons. This does not need to be political. Each elected govt has the same modus operandi.

Morning all.

lojo1000

And to those "titans" of industry who "keep the country running", what innovation have they shown in the past 3 years?

Prices have risen to their benefit - take a look at some earnings reports. 

Companies thrive either through innovation or selling more at higher prices.

The argument that these high-paid execs and the companies they run pay the taxes from which we all benefit is really looking at the reality from the wrong angle.

Demand and price rises are created by central bank's easy money policies which incentivise short term spending and borrowing in excess of long-term productivity. That new money (borrowed by you and created by banks) is what drives an increase in the money supply, raises wages and profits and hence more tax revenues.

That DOES NOT MEAN it reflects innovation or value-added output which is the only long-term sustainable economic model that should be adopted.

Someone please educate our children how the economy works.

lojo1000

Comment this morning on UK inflation:

Strummer22

lojo1000 said:

I do not believe prices need to rise 2% per annum to incentivise business to turn up to work each day. That is another b*llshit line which gets trotted out by media/central bankers/politicians and even economic academics (who haven't shown any innovation for 100 years.)

I think this came up in this thread previously, or at least I read some news articles mentioning it. The 2% target is entirely arbitrary and doesn't really have any economic justification. 

Altior

Obviously if saving rates are significantly higher than inflation, it sucks money out of the economy. It's the opposite to slashing rates to encourage spending. I'm sure lots of people here have been shifting to 'risk free' options, which are only more appealing if the value of your cash in real terms is not being eroded away. 

As I've always stated on this topic however, what we do will be ultimately determined by the Fed. There's theory, and there's the real world. 

Altior

Election looming, end of thread until August! 

ReadySteadyPop

Altior said:

Obviously if saving rates are significantly higher than inflation, it sucks money out of the economy. It's the opposite to slashing rates to encourage spending. I'm sure lots of people here have been shifting to 'risk free' options, which are only more appealing if the value of your cash in real terms is not being eroded away. 

As I've always stated on this topic however, what we do will be ultimately determined by the Fed. There's theory, and there's the real world. 

Exactly, and it looks like mortgage rates are on the move up again.

BarelySentientAI

ReadySteadyPop said:

Altior said:

Obviously if saving rates are significantly higher than inflation, it sucks money out of the economy. It's the opposite to slashing rates to encourage spending. I'm sure lots of people here have been shifting to 'risk free' options, which are only more appealing if the value of your cash in real terms is not being eroded away. 

As I've always stated on this topic however, what we do will be ultimately determined by the Fed. There's theory, and there's the real world. 

Exactly, and it looks like mortgage rates are on the move up again.

Not according to any news source apart from you.

The most recent rate changes have almost all been cuts.