UK Inflation at 3% - BOE Interest Rate Cut In June Unlikely?

nathanhill69

http://news.bbc.co.uk/1/hi/business/7397850.stm

Well, all in the title really (although we all know in reality it's above 3%). Theoretically it limits the BOE's ability to reduce interest rates in the short term HOWEVER will they overlook their commitment to keep inflation at 2% in favour of easing the credit crunch and stimulating the property market? (Rhetorical Question)

spcdust

maveli

There used to be a time when interest rate had a significant effect on inflation which is now replaced by Energy(oil, gas etc) price. May be it is time to replace BoE by something else which will adjust the tax on Oil on a monthily basis to control inflation.

Conrad

Interest rates currently are in themselves inflationary as they force people to find more money which has a knock on cost to wages and therefore the cost of goods and services.

I think they need to be cut hard in order to reduce inflation - odd eh!

nathanhill69

Conrad wrote: »

Interest rates currently are in themselves inflationary as they force people to find more money which has a knock on cost to wages and therefore the cost of goods and services.

I think they need to be cut hard in order to reduce inflation - odd eh!

Personally I suspect we'll see the current 5% interest rate holding fast for the next two or three months?