Interest Rates - BoE should cut them or the governer should go!

SuperV

Quote:
"Inflation = difference in prices now compared to before. You want to see prices the same as or less than before then make VAT 15%. Overnight you will reduce the inflation rate by 2.5% since everything is 2.5% cheaper now."

Exactly!

Since everybody has to eat and use energy the price of oil is like some kind of tax!

Suggestion how to cut the price of petrol in the UK:
1) make the whole tax on petrol constant in absolute terms at the level of US$60 per barrel
2) investigate possible existence of oil cartel.

mpsavuk

SuperV wrote: »

Interest Rates - BoE should cut them or the Governor should go!
At the moment interest rate of BoE is with no real reason high. Explanation that it is high in order to calm inflation is superficial one as the main reason for the higher inflation is external influence – price of oil! Basic rate of BoE can influence only internal drivers of inflation.
Very probably if the price of oil and its influence is taken out of inflation statistic, inflation would be around 1% or less.
By keeping high basic rate Governor just shows once again (after Northern Rock) that he doesn’t know what he is doing.
Solution – either the basic rate of BoE should be cut or the Governor should go before he does even more damage! An action is needed! Like the one with punitive bank overdraft charges!

Methinks you are playing devils advocate here!

Ian_Griffiths_Halifax

SuperV wrote: »

2) investigate possible existence of oil cartel.

What do you mean 'possible' and who needs to 'investigate'? It's obvious to anybody with a brain the size or a Jelly Bean

SuperV

Quote:
"What do you mean 'possible' and who needs to 'investigate'? It's obvious to anybody with a brain the size or a Jelly Bean"

I don't have a proof so I have to use word possible.

The UK Government, of course!!!

SuperV

To clarify - not OPEC but cartel consisting of Shell, BP, Total etc.

SuperV

No other comments? I hoped to make my point even sharper using this discussion board.

SuperV

And today's business reports support my point - the interest rate is too high. Recession will just be a beginning.

SuperV

BoE interest rate is too high as it doesn't control what it can, British drivers of inflation, but tries to control what it can't - price of energy!

ziknik

SuperV.

The B of E remit is the following.

1. To keep London at the helm of the worlds financial markets
2. To make lots of money for the Banking Cartel
3. To lie about the real remits

King is doing a good job with his real remit

SuperV

Ziknik,

It is PM's job to define how the inflation is calculated (as pointed out before in one of the posts) and to define target inflation as well.

King may do a great job as you say, but I don't think so. There won't be money even for Banking Cartel as they will have to write down huge amounts. Not only on mortgages, but also credit cards, other kind of credits like credits for cars, furniture, kitchens, holidays.

The debt of the whole UK is how much, few trillions? Mark it 20% down, maybe more. It can get worse than in Japan.