Prepare for a Feb rate cut

Fella

King has as good as promised one:

http://uk.reuters.com/article/topNews/idUKL2243202020080122

"we start the year from a position in which Bank Rate, at 5.5 percent, is probably bearing down on demand"


Funny, I could have sworn the MPC was an independent body who's remit was to curb inflation. If I were cynical I might be tempted to wonder whether Brown had been on the phone telling King to do whatever he had to do to keep the "healthy economy" (lol) going until after the election....


ho hum

ixwood

IR effects lags behind, so effectively the BOE is attempting to work 12-18 months ahead. It's not hard to believe inflation worries may have eased in that time frame with likely global slowdown and less demand for everything.

Don't get me wrong, I'm sure that Greedy Gordon wants to postpone bubb epopping until after the next election, but I don't think a cut now is unreasonable.

agracooble

Fella wrote: »

King has as good as promised one:

http://uk.reuters.com/article/topNews/idUKL2243202020080122

"we start the year from a position in which Bank Rate, at 5.5 percent, is probably bearing down on demand"


Funny, I could have sworn the MPC was an independent body who's remit was to curb inflation. If I were cynical I might be tempted to wonder whether Brown had been on the phone telling King to do whatever he had to do to keep the "healthy economy" (lol) going until after the election....


ho hum

Well lets hope not - it's not in anyone's interest!

agracooble

I am supprised to hear such stupid comments on this thread!

ManAtHome

Ah, but when we're into the less demand for stuff bit, won't they have to continue ignoring inflation and cut rates again to stimulate the economy..? Repeat until nobody can afford the minimum payments...?

Fella

agracooble wrote: »

I am supprised to hear such stupid comments on this thread!

Which comments....?

ixwood

I'm no expert (by any means), but isn't deflation just a big a risk as inflation with the credit contaction? Billions and billions wiped off markets, property, company profits etc.

Money is dissapearing on one hand and is being replaced on the other.

ManAtHome

More about recession than deflation - after all, markets, property, profits don't figure in inflation calculations. Don't think slashing central bank rates will have much impact though, that's down to what commercial banks have to pay for their money - if BoE reductions trash the quid, makes the "cheap" money from the east more expensive. They've spent the last 4 or 5 years painting themselves into a corner - dunno what the get-out (if any) is.

According to chancellors, ex-chancellors, and a variety of rent-a-gob wanabees wheeled out for the TV, the UK is "well placed to weather the storm", so maybe no need for cuts (lol).

aardvaak

As a grand old feller once told me people should never complain at paying interest whatever rate it is as in effect you are borrowing someone elses life - they have saved the money in a lifetime!

ixwood

Not these days. You're paying (1/250,000,000 of) some bankers fat bonus!