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BoE Interest rate rise - November?


Frank Hovis

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I haven't believed any of the predictions of rises thus far until this one.  Inflation is indeed roaring away (well, relatively) and the economy is holding up.

 

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LONDON (Reuters) - The Bank of England said it was likely to raise interest rates in coming months if the economy and price pressures kept growing, flagging Britain’s first rate hike in a decade.

Policymakers voted 7-2 on Thursday to keep rates on hold for now at a record-low 0.25 percent, as expected.

But in a week when data showed UK prices rising faster and unemployment falling to a four-decade low, they said their tolerance for above-target inflation was lessening.

The Brexit vote has put the BoE in a dilemma as it sought to balance the need to support the economy through the shock of leaving the European Union in March 2019 while also keeping a grip on fast-rising inflation.

It said that, if the trend towards shrinking spare capacity and rising underlying inflation continued, “some withdrawal of monetary stimulus was likely to be appropriate over the coming months.”

Sterling leapt by a cent against the dollar after the statement and 10-year gilt yields increased by 4 basis points to 1.18 percent, their highest level since the BoE’s last meeting on Aug. 3.

“I would describe (a rate hike in) November as being live,” Nomura economist George Buckley said.

But weaker than expected inflation or disappointing growth in jobs or wages could still throw the BoE off course, he added.

 

LIBOR and sap rates were marginally up on teh prior month (first time for ages) close of play yesterday so the markets are beginning to think it too.

http://uk.reuters.com/article/uk-britain-boe/bank-of-england-paves-way-for-first-rate-hike-in-a-decade-idUKKCN1BO2X2

 

November does indeed sound like a good call; they won't do it just before Christmas.

Of course knwoing Carney he will take any excuse to not to do it; but at the moment there doesn't seem to be one.

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22 minutes ago, Frank Hovis said:

I haven't believed any of the predictions of rises thus far until this one.  Inflation is indeed roaring away (well, relatively) and the economy is holding up. economic figures are being massaged convincingly 

 

LIBOR and sap rates were marginally up on teh prior month (first time for ages) close of play yesterday so the markets are beginning to think it too.

http://uk.reuters.com/article/uk-britain-boe/bank-of-england-paves-way-for-first-rate-hike-in-a-decade-idUKKCN1BO2X2

 

November does indeed sound like a good call; they won't do it just before Christmas.

Of course knwoing Carney he will take any excuse to not to do it; but at the moment there doesn't seem to be one.

Correct for you Frank :)  On what planet do the establishment think the state of the economy is healthy?  

Lots of people are on insecure contracts.  Lots can only get 16 hour a week contracts.  No one can afford the crazy house prices.  Savings are at the lowest rate for 50 years.  Massive amounts of debt, held both personally and by the state. Growing polarisation of wealth.  Massive trade deficit.  

I'm not convinced that these make for robust economic figures  

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22 minutes ago, One percent said:

Correct for you Frank :)  On what planet do the establishment think the state of the economy is healthy?  

Lots of people are on insecure contracts.  Lots can only get 16 hour a week contracts.  No one can afford the crazy house prices.  Savings are at the lowest rate for 50 years.  Massive amounts of debt, held both personally and by the state. Growing polarisation of wealth.  Massive trade deficit.  

I'm not convinced that these make for robust economic figures  

By the measures used by central banks for assessing the economy it's okay!

That individual circumstances are going down the plughole at a rate of knots is not something that inputs into the rate setting process.

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Inflation was at 5% in 2010 for around two years and rates did not move. Carney will invent some reason for not raising rates .... unemployment ... slack in the economy .... GDP growth etc etc. and as usual he has all the 'may need to raise rates' phrase. Carney will not raise rates unless forced and I suspect rates will not rise until his daughter finishes her course. When they do go up it will be by 0.25% ............. back to the previous 400 year low of 0.5%. We have emergency rates (still) because we still have an emergency or it is a good way to make rich people richer; suspect it is both and this is why it will continue for a few more years, Japan has nearly 30 years of ZIRP.

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Pravda on just now with reports of a rate rise.

Strange that I thought there was a vote to be had first. Yep that is all complete manipulated bollocks.

They'll go up next meeting.

If only in hope that it will trash the economy and scupper Brexit.

 

 

 

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6 hours ago, satch said:

Inflation was at 5% in 2010 for around two years and rates did not move. Carney will invent some reason for not raising rates .... unemployment ... slack in the economy .... GDP growth etc etc. and as usual he has all the 'may need to raise rates' phrase. Carney will not raise rates unless forced and I suspect rates will not rise until his daughter finishes her course. When they do go up it will be by 0.25% ............. back to the previous 400 year low of 0.5%. We have emergency rates (still) because we still have an emergency or it is a good way to make rich people richer; suspect it is both and this is why it will continue for a few more years, Japan has nearly 30 years of ZIRP.

Yep. 

Zero chance of a rate rise until the tide reverses and a rate rise WILL make the rich richer. Right now everything is going to plan. Assets rising and the poor are slaves for all their lives.

What's not to like (if you're rich) ?

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Is there someone in the Treasury leaning hard on Mark Carney to not raise rates?

Think of all those MPs who are landlords who are barely covering their mortgage payments with the rent! o.O

:PissedOff:

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28 minutes ago, UmBongo said:

Is there someone in the Treasury leaning hard on Mark Carney to not raise rates?

Think of all those MPs who are landlords who are barely covering their mortgage payments with the rent! o.O

:PissedOff:

Don't worry, they'll just put the rent up innit.  xD

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Long time lurking

Very slightly optimistic this time round purely from the perspective of where the US goes sooner or later we will be forced to do the same..how much longer can we resit? was/isn`t there talk of the US hiking again in the autumn (November) ? we will still be one step behind if both do it 

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On 16/09/2017 at 10:39, UmBongo said:

Is there someone in the Treasury leaning hard on Mark Carney to not raise rates?

Think of all those MPs who are landlords who are barely covering their mortgage payments with the rent! o.O

:PissedOff:

But think of all that capital appreciation due to funny money..!

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19 hours ago, Long time lurking said:

Very slightly optimistic this time round purely from the perspective of where the US goes sooner or later we will be forced to do the same..how much longer can we resit? was/isn`t there talk of the US hiking again in the autumn (November) ? we will still be one step behind if both do it 

I'm getting the impression that the US won't hike again this year; I'm still thinking that we will but only a quarter point and it may not even be until February.

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Yeah, after hinting that rises were coming Earthport said yesterday, "However, Carney tempered expectation yesterday saying that any hikes would be gradual and limited in their scale."

Trying to be all things to all men.

Obviously though, they are stuck between a rock and a hard place, inflation is increasing but if they raise rates the government and the populace are so indebted that the housing market and the economy will suffer.

(Now lets have a look at this Stealth Forum)

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Low interest rates, high house prices, a demograhic class of people hoarding all the wealth, more debauchery.

Sound like the end of an empire. The West is in decline. Hold on tight and enjoy the ride.

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4 hours ago, UmBongo said:

Low interest rates, high house prices, a demograhic class of people hoarding all the wealth, more debauchery.

Sound like the end of an empire. The West is in decline. Hold on tight and enjoy the ride.

I wonder just how long the plates can be kept spinning.  I think a lot of people are in for a lot of trouble very soon...but then again I've thought that for about 10 years now.

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2 minutes ago, ILikeCake said:

I wonder just how long the plates can be kept spinning.  I think a lot of people are in for a lot of trouble very soon...but then again I've thought that for about 10 years now.

Yep, we have something to thank tos for.  The plates do appear to be defying gravity. 

They have kept it going through massive debt and various props and free money for the feckless, all paid for through the printing machines. It is not sustainable.

When it blow, it will be very much worse than what it would have been if they had just let it run its course in 2007.  

The next move imho will be to do a Greek on us and start robbing savers directly. 

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1 minute ago, One percent said:

Yep, we have something to thank tos for.  The plates do appear to be defying gravity. 

They have kept it going through massive debt and various props and free money for the feckless, all paid for through the printing machines. It is not sustainable.

When it blow, it will be very much worse than what it would have been if they had just let it run its course in 2007.  

The next move imho will be to do a Greek on us and start robbing savers directly. 

Totally agree.

I honestly don't know what I would do if they started robbing my savings directly (probably nothing more than piss & moan and post about it on here in reality).  I've told my friends and family about what's happened in Greece and they think I'm making it up.

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Just now, ILikeCake said:

Totally agree.

I honestly don't know what I would do if they started robbing my savings directly (probably nothing more than piss & moan and post about it on here in reality).  I've told my friends and family about what's happened in Greece and they think I'm making it up.

Did they not watch the news?  

Yep, I think we will be all on here calling them every name we can think of.  However, what, in reality, can an individual do against the state?  

If they do go that far though, it will mark the beginning of the end.  I remember my gran keeping loads of money in the house.  She did not trust the banks. The 30s crash was in living memory and this set in a lifelong distrust. 

We would find people shoving money, gold coins and other things of value under the mattress. People would stop paying taxes as much as they possibly could. I guess that this is one reason the establishment is trying to do away with cash. 

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3 minutes ago, One percent said:

Did they not watch the news?  

Yep, I think we will be all on here calling them every name we can think of.  However, what, in reality, can an individual do against the state?  

If they do go that far though, it will mark the beginning of the end.  I remember my gran keeping loads of money in the house.  She did not trust the banks. The 30s crash was in living memory and this set in a lifelong distrust. 

We would find people shoving money, gold coins and other things of value under the mattress. People would stop paying taxes as much as they possibly could. I guess that this is one reason the establishment is trying to do away with cash. 

Not unless it's about football or celebrity nonsense.  I have to be careful with what I say around my friends and family they already think I'm a bit weird.

Again I agree.  It's so frustrating seeing what's going on around me and being able to do very little about it.  Ignorance probably is bliss.

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  • 2 weeks later...

Mr Carney said a rate rise "could happen sooner than markets currently expect".

The consensus among economists was that rates would rise in the first half of next year, or even earlier.

Alan Clarke, eurozone and UK economist at Scotiabank, said Mr Carney had a habit of making big shifts in policy.

He acknowledged there was "already great speculation about the exact timing of the first rate hike" from the current record low of 0.5%, adding that the decision was "becoming more balanced".

Mr Carney emphasised that there was "no pre-set course" on when to raise rates. There was more spare capacity in the economy that would need to be used up first, he said.

And he also reiterated that the timing of the first rise was less important than the speed at which subsequent increases were made.

"We expect that eventual increases in Bank rate will be gradual and limited," he said.

As you probably realised these quotes are from a BBC article .... published in June 2014 .... and there was no rate hike Carney cut rates to 0.25%, a new record low.

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Yep.  Afaict, carnage seems to like slapping his gums for no apparent reason.  On the So-Called BBC earlier today, so talking head was saying that he has said this so many times, they are starting to call wolf on him.  He added so, to counter this, he really, really, really does mean it this time. B|

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1 minute ago, Green Devil said:

Talk is cheap.

Not when you are the governor of the Bank of England and the markets hang on your every word. This is all about him attempting (badly) to manipulate these markets. I think they may have just stopped listening. 

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16 hours ago, One percent said:

Not when you are the governor of the Bank of England and the markets hang on your every word. This is all about him attempting (badly) to manipulate these markets. I think they may have just stopped listening. 

Yes. Usually the boe chairman could move  the pound with such talk.  Now nothing.  Says a lot.

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