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That time of the month - Interest Rates! [Jan 08]
poppy10_2
Posts: 6,588 Forumite
So, what will the MPC decide? Save homeowners or reign in inflation?
poppy10
What will the MPC's decision be on Thrusday? 90 votes
-0.5%
3%
3 votes
-0.25%
37%
34 votes
HOLD
57%
52 votes
+0.25%
1%
1 vote
+0.5%
0%
0 votes
0
Comments
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I voted for a hold, though it's hard to guess, second guessing committees is difficult since by their nature they allow individuals to abdicate responsibility for their actions.
Inflation is on the way up: wage inflation & CPI so to drop again would appear to send the signal that the BoE consider inflation to be of less importance than avoiding a recession. I.e. that they are ignoring their primary remit."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
It's not about homeowners any more. It's about the wider economy IMO.
The choice the BoE faces I think will be between stagflation and deflation. Central banks are petrified of deflation because they don't know their economic history properly. Everyone thinks of Japan 1990-today and the US 1930s when they think of deflation. There have been periods of benign deflation too for example during the 1870s.
The correct policy response to the Chinese and Indians joining the world economy should have been to allow a period of deflation as they have increased efficiency dramatically through trade.
Instead, in fear of deflation, central bankers have allowed asset prices to soar and we end up in the position where we are now. I think that the choices the MPC have are pretty stark: let inflation in asset markets spread into the broader goods market (ending in stagflation) or let the bubbles burst (ending in deflation). Neither is a good outcome.0 -
It's not about homeowners any more. It's about the wider economy IMO.
The choice the BoE faces I think will be between stagflation and deflation. Central banks are petrified of deflation because they don't know their economic history properly. Everyone thinks of Japan 1990-today and the US 1930s when they think of deflation. There have been periods of benign deflation too for example during the 1870s.
The correct policy response to the Chinese and Indians joining the world economy should have been to allow a period of deflation as they have increased efficiency dramatically through trade.
Instead, in fear of deflation, central bankers have allowed asset prices to soar and we end up in the position where we are now. I think that the choices the MPC have are pretty stark: let inflation in asset markets spread into the broader goods market (ending in stagflation) or let the bubbles burst (ending in deflation). Neither is a good outcome.
I heard a similar description about five years ago, maybe more, that we should allow to be imported since it was due to rapidily increased productivity - as per Imperial Britain."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
I voted for a .25% cut, but I think it's 50/50 cut or hold this month. If they hold, I'm sure it'll be a cut in Feb.0
-
Guy_Montag wrote: »I heard a similar description about five years ago, maybe more, that we should allow to be imported since it was due to rapidily increased productivity - as per Imperial Britain.
The deflation of the 1870s did end badly with some pretty bad times in the 1880s but I don't think you can put that down to deflation as such, more to things like the increasing cost of Empire.
I think there'll be a cut and, on balance, that's probably a good thing.0 -
I'm going for no change - they won't cut again so quickly. I think there is a 70% chance they'll hold, 30% for the cut (they won't hike).Errors of opinion may be tolerated where reason is left free to combat it. - Jefferson0
-
Hold.
They'd like to cut, but I think Merv will hold it steady this month. He is not (as) politically motivated as some on the MPC.anger, denial, acceptance
0 -
Well Generali's old Big Bank have just whacked on 30 yards ($30 Billion) on the MPC holding, so it looks like they've made up their mind.Errors of opinion may be tolerated where reason is left free to combat it. - Jefferson0
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Melissa177 wrote: »I'm going for no change - they won't cut again so quickly. I think there is a 70% chance they'll hold, 30% for the cut (they won't hike).
Those were pretty much the implied chances from the Betfair odds yesterday. I suspect that I'd be voting for a cut if I was on the MPC.Melissa177 wrote: »Well Generali's old Big Bank have just whacked on 30 yards ($30 Billion) on the MPC holding, so it looks like they've made up their mind.
Stone me! They really have become a massive hedge fund rather than an investment bank. They'll jump the wrong way eventually, it's inevtible.0 -
Stone me! They really have become a massive hedge fund rather than an investment bank. They'll jump the wrong way eventually, it's inevitable.
Yup!! That is a lot of dosh, even for Big Bank.
That said, I have an interview there on Thursday :eek:Errors of opinion may be tolerated where reason is left free to combat it. - Jefferson0
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