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

Hoenir

lojo1000 said:

To add insult to injury, now GBP is falling even as yields are rising - due to lower global investor confidence in UK 

Time to take stock of macro events elsewhere before disappearing down rabbit holes. 

Hoenir

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

Reeves plans also depend on borrowing large sums of money. 

Altior

Hoenir said:

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

Reeves plans also depend on borrowing large sums of money. 

Yep, increased spending + lower growth = higher borrowing requirement/yields. 

Maka344

What does this mean for BoE base rates for the next 12-24 months? Swap rates seem to be pricing in 2 rate cuts this year. Analysts seem to think 4. Are we heading for a large recession and crash? 

lojo1000

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

What did 14 years of the 'others'  policies do for productivity?

Altior

lojo1000 said:

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

What did 14 years of the 'others'  policies do for productivity?

That's a political question, and this thread is about central rates now and going forward. I'm simply pointing out the facts from the most recent budget, which was compiled and delivered by Reeves. She raised taxes on business and raised public spending. It's not controversial to say those choices are inflationary, and the 'independent' obr slashed their growth forecasts based on her numbers (not externalities). 

lojo1000

Altior said:

lojo1000 said:

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

What did 14 years of the 'others'  policies do for productivity?

That's a political question, and this thread is about central rates now and going forward. I'm simply pointing out the facts from the most recent budget, which was compiled and delivered by Reeves. She raised taxes on business and raised public spending. It's not controversial to say those choices are inflationary, and the 'independent' obr slashed their growth forecasts based on her numbers (not externalities). 

Raising tax is not inflationary per se. It does not change the amount of money in the economy.

If anything in this example it will be deflationary due to a lack of confidence = velocity of money falls.

Altior

lojo1000 said:

Altior said:

lojo1000 said:

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

What did 14 years of the 'others'  policies do for productivity?

That's a political question, and this thread is about central rates now and going forward. I'm simply pointing out the facts from the most recent budget, which was compiled and delivered by Reeves. She raised taxes on business and raised public spending. It's not controversial to say those choices are inflationary, and the 'independent' obr slashed their growth forecasts based on her numbers (not externalities). 

Raising tax is not inflationary per se. It does not change the amount of money in the economy.

If anything in this example it will be deflationary due to a lack of confidence = velocity of money falls.

Raising national insurance (tax) that employers pay on employees is most definitely inflationary. If on costs go up, either the margin is squeezed, or it's added to the selling price. Depends upon the elasticity of the product or service, however it will inevitably lead to higher prices in the wider context (and quite likely, job losses and the throttling of plans). They raised minimum wage above inflation at the same time. 

Hoenir

Maka344 said:

What does this mean for BoE base rates for the next 12-24 months? Swap rates seem to be pricing in 2 rate cuts this year. Analysts seem to think 4. Are we heading for a large recession and crash? 

I probably posted this same comment many moons ago. Mortgage rates will finally settle above BOE base rate. Other than those mortgage products which directly rate linked. Expectatations of future major mortgage lending rate reductions are far too optmistic. 

lojo1000

Altior said:

lojo1000 said:

Altior said:

lojo1000 said:

Altior said:

Another 10bps higher and MSM seem to be blaming Reeves? Perhaps the VIs are crying for lower taxes but certainly do not want higher interest rates.

Reeves ratcheted up spending and throttled business growth by hiking their costs. An obvious way business handles increased costs is to put their prices up. Of course, 'political' debate is apparently frowned upon, so best not dig into it much, but the apparently independent obr forecast lower growth, specifically based on Reeves' budget policies.  

What did 14 years of the 'others'  policies do for productivity?

That's a political question, and this thread is about central rates now and going forward. I'm simply pointing out the facts from the most recent budget, which was compiled and delivered by Reeves. She raised taxes on business and raised public spending. It's not controversial to say those choices are inflationary, and the 'independent' obr slashed their growth forecasts based on her numbers (not externalities). 

Raising tax is not inflationary per se. It does not change the amount of money in the economy.

If anything in this example it will be deflationary due to a lack of confidence = velocity of money falls.

Raising national insurance (tax) that employers pay on employees is most definitely inflationary. If on costs go up, either the margin is squeezed, or it's added to the selling price. Depends upon the elasticity of the product or service, however it will inevitably lead to higher prices in the wider context (and quite likely, job losses and the throttling of plans). They raised minimum wage above inflation at the same time. 

Where was all the inflation from previous rises then? You need to consider context.