Poll - What do YOU THINK the MPC should do on 7th Feb?

kingkano

Wouldn't increasing the rate just ensure we have a recession/depression/economic meltdown?? Kiss your pension goodbye as the stockmarket goes. Probably kiss your job goodbye as companies start laying people off because its HELLA cheaper to do business elsewhere again.

But atleast house prices will be at the level you wanted. Shame you still couldn't buy one tho?

merlinthehappypig

Guy_Montag wrote: »

Actually the majority doesn't rule in this country, which I must say is a bloody good thing. If they did we'd probably have public executions.

Come on Guy, you aren't thinking creatively.

We'd have an endless series of Saturday night TV programmes where all the convicted criminals got to put their case in front of an audience.

We could all ring up using premium rate numbers to decide who to save and who gets killed, having previously decided the method by public acclaim.

Then we would have the live executions with interviews with the victims and criminal's families where they could shout at each other across the TV studio.

Then the 'celebrity' murders and rapists who got off could appear in an endless series of spin offs.

If I could have a wager on this coming true eventually, I'd risk it.

Good post by the way.

alared

Running_Horse wrote: »

I didn't realise this was within the remit of the BofE. Perhaps they can all come out on the pavement when raising interest rates and wag their fingers in disapproval.

If you hadn`t chopped my sentence in half, the remit of the BoE was the first thing mentioned very clearly.

adr0ck

dannyboycey wrote: »

It would also benefit those hard working people who actually save money (yes we do exist) - Because at the moment, the government are taking the p*** out of us big time.

there are lots and lots of hard working people who don't save

because thay can't afford to

this wouldn't help them at all (and no i don't mean people who get into debt bigtime.....talking about the people who work hard but still can't afford to put anything away)

wolvoman

Well it seems the poll had the desired effect of showing the divergence between what the BoE are expected to do and what many posters here want them to do.

What is interesting is that even the most bearish economists seem to suggest that holding rates might be a good way of keeping inflation in check yet many here are suggesting they go and raise rates much higher than they are now.
Surely that is suggesting you think the BoE's remit is not to control inflation but rather to engineer house price deflation?


Which leads onto another interesting debate.
I make an assumption (could be wrong of course) that most people on here who forecast house prices to crash are the very same ones who want monetary policy changed far out of normal expectation to create the very scenario they forecast.
So which is it to be, a forecast based on current and predicted policy? Or is it a hope based on policy that most economists and especially the BoE and government are going to follow?

WTF?_2

ds1980 wrote: »

Still don't quite understand the doom mongers sentiments. What good would raising rates do? Its not the rates that will hold down inflation really is it.

Wrong, rates have a marked effect on inflation.

First, they shore up the exchange rate. Since the country now imports so much of what we consume then a slipping pound means higher prices on all sorts of things from food through clothes to electrical goods. More importantly, if the pound falls against the dollar we have to pay more for oil and oil related products and services. ie. Pretty much everything, as so much depends on oil (especially food) and transporting goods around consumes oil.

Second, higher interest rates discourage borrowing and encourage saving. This takes money out of the general economy and thus puts downward pressure on inflation.

ds1980 wrote: »

What exactly is inflation anyway? If a pint of milk costs 50p and inflation is 3 % does that mean that milk will be now 51.5p in essence? If i go down the road to aldi then milk is 40p so inflation is negligible.

Inflation means on average your pound buys you less. So unless you are counting on your wages increasing along with inflation you'll be steadily getting worse off. It's a bit like a tax on having money that keeps going up.

Note that this includes savings, so people who have been prudent and have saved away see the value of their hard earned savings eroded. Especially if the government is running low interest rates which further reduces the benefits of saving.

firsttimetom

I vote for a hold.

If rates lower too too much, the value fo our pound is going to fall, increasing the rate of inflation further.

It seems to me that people can just about afford their bills, I'm getting a fairly nice rate as a saver (incidentally if you can't save ANYTHING every month, then you really have bad money management) and House prices are levlling off.

There seems to be too much pressure form VI's to keep the housing market from cooling off. They are not going to see double digit rises for a long time and never should have done. We are now going to have to face facts and years of stupid cheap credit and BTL are now going to have to unravel. It wouldn't surprise me if it took 10 years for the economy to start to recover.

Do I want a major fall in house prices: Yes
Do I want a recession: No (perhaps not unavoidable if a HPC occurs, but these are my wants not my ideals)
DO I want to Interest on my savings fall to help people inflate away their stupid debts that they took out to buy things they couldn't afford and then moan about how unfair it is: Not a chance in hell.

I do feel I am being penalised for saving and not contibuting all my money to 'Gordons Miracle'

Jennifer_Jane

I thought the question was what should the BoE do? So I voted for .5% decrease. I think they will decrease by .25%. I would prefer they decreased them by .75%.

Only reason for this is I could really do with a more bouyant stock market and for some stimulation in the economy (esp. the manufacturing sector). My reasons are selfish as I am over-exposed to shares - so my own fault!

Jen
x

MiserlyMartin

wolvoman wrote: »

....What is interesting is that even the most bearish economists seem to suggest that holding rates might be a good way of keeping inflation in check yet many here are suggesting they go and raise rates much higher than they are now.
Surely that is suggesting you think the BoE's remit is not to control inflation but rather to engineer house price deflation?...

Well the BOE have previously said that their remit is not to control house prices - it is to control inflation. Although their actions have been much different to this statement because at the slightest whiff of a house price crash in 2005, they cut rates. This made house prices take off again. The MPC's policies have just engineered the biggest UK house price inflation in history. They want to stop this crashing down and thus effecting the wider economy. So they are worried about it. On balance they have a difficult job: Inflation on one side - and the housing market on the other. They may leave it on hold.

But personally I think they should raise by 0.5% to control inflation and end this buy now worry later borrowing binge. These loan and credit card companies will increase their rates if the BOE do.

ds1980

Guy_Montag wrote: »

Excellent, by going to Aldi you're putting downward pressure on prices. But why are you going to Aldi, could it perhaps be because you've not had a pay rise & your mortgage has just gone up? Those are the effects of increasing rates, so it does have an effect on inflation.

Downward is good no? My point exactly. if shops werent allowed to fix prices and we didnt have monopolies of supermarkets then that wouldnt happen would it? If tesco sold milk for 10 p a litre would they still make billions each year? i pay my own wages so so i can have a rise when i want which is always nice....like i said it doesnt really make much difference to me.

Actually if you look around you will see that petrol prices in most areas are fairly similar. That's because the cost of petrol is mostly made up of tax & crude oil costs. Both of which are high. Exactly my point again, how come petrol is still at its peak when crude has dropped 20%??? answer greed. And no way is it the same ill pass 5 petrol stations on the way home tonight ranging between £1.01 and £1.09p 8 p over millions of people has an affect on inflation does it not?


Why?

so that we try and stem off a recession.

So you are suggesting that people should no longer take any responsibility for their own actions? I can't see that is a terribly good solution to the country's problems.

no but there not the only ones to blame


Actually the majority doesn't rule in this country, which I must say is a bloody good thing. If they did we'd probably have public executions.

it doesnt? so when jurors can't reach a verdict they say lets go for a mnority then? you might think your poxy vote a gE time means something but sadly it doesn't.

Jolly good, make mine a real ale. Not fussed which.

Boddingtons?