Forget inflation - time to cut rates in the UK
Discussion
Unlike those dimwits predicting $200 oil, I never believed it was sustainable at bloody $120 It's at ~$95 now... IMO it WILL come back further - you watch.
Unemployment is rising and is due to escalate significantly.
House prices - well, the less said the better.
We're facing an enormous credit contraction.
We've got a whole load of problems.... let's not go into them - we all know what they are.
I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
Does anyone else think, like me, that NOW is the time.... We need to see rates at 4% IMO... enough is enough.... If they wait longer, in six months inflation will be gone because the country will be literally DEAD.
P.S. I reckon HBOS is going to go bang.. this really is unbelievable.
Unemployment is rising and is due to escalate significantly.
House prices - well, the less said the better.
We're facing an enormous credit contraction.
We've got a whole load of problems.... let's not go into them - we all know what they are.
I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
Does anyone else think, like me, that NOW is the time.... We need to see rates at 4% IMO... enough is enough.... If they wait longer, in six months inflation will be gone because the country will be literally DEAD.
P.S. I reckon HBOS is going to go bang.. this really is unbelievable.
Edited by Murcielago_Boy on Monday 15th September 14:52
Edited by Murcielago_Boy on Monday 15th September 14:53
I did think the latest MPC change should have been a cut, if not the August decision.
Given the time-lag between the rate cuts and even the slightest sniff of any effect, that would have been the right time.
Now were probably in a bit of a no-man's land, where a cut won't help and holding the rate won't hurt; there's only two more months left until everything grinds to a half for Xmas (what a riot that will be this year!) and then it always inevetably takes time for things to wake up in January.
IMHO, whatever is done from now on, will only begin to have any real effect from the end of Q1 2009.
Given the time-lag between the rate cuts and even the slightest sniff of any effect, that would have been the right time.
Now were probably in a bit of a no-man's land, where a cut won't help and holding the rate won't hurt; there's only two more months left until everything grinds to a half for Xmas (what a riot that will be this year!) and then it always inevetably takes time for things to wake up in January.
IMHO, whatever is done from now on, will only begin to have any real effect from the end of Q1 2009.
Murcielago_Boy said:
Unlike those dimwits predicting $200 oil, I never believed it was sustainable at bloody $120 It's at ~$95 now... IMO it WILL come back further - you watch.
Unemployment is rising and is due to escalate significantly.
House prices - well, the less said the better.
We're facing an enormous credit contraction.
We've got a whole load of problems.... let's not go into them - we all know what they are.
I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
Does anyone else think, like me, that NOW is the time.... We need to see rates at 4% IMO... enough is enough.... If they wait longer, in six months inflation will be gone because the country will be literally DEAD.
P.S. I reckon HBOS is going to go bang.. this really is unbelievable.
As an ex commodities dealer I kind of know a bit about trading markets, or I like to think I do I should say. Oil was always going to come back down to the $100 in the short term that was pretty obvious and we all made handsome profits over the summer but the factors that made it go through $140 in the first place are still all there. By mid next month I would expect to see a big rise from somewhere in the high 80's/low 90's to over $120 by January. Unemployment is rising and is due to escalate significantly.
House prices - well, the less said the better.
We're facing an enormous credit contraction.
We've got a whole load of problems.... let's not go into them - we all know what they are.
I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
Does anyone else think, like me, that NOW is the time.... We need to see rates at 4% IMO... enough is enough.... If they wait longer, in six months inflation will be gone because the country will be literally DEAD.
P.S. I reckon HBOS is going to go bang.. this really is unbelievable.
Edited by Murcielago_Boy on Monday 15th September 14:52
Edited by Murcielago_Boy on Monday 15th September 14:53
They should have been put up and left up in 2005 - but the first sign of flaggin house price inflation had them bricking it so to speak.
Even if interest rates drop the banks don't have any money left anyway. The problem was caused by excessive borrowing and surely can't be saved by borrowing more.
Put the rates up, flush all the crap out the system and move on.
Even if interest rates drop the banks don't have any money left anyway. The problem was caused by excessive borrowing and surely can't be saved by borrowing more.
Put the rates up, flush all the crap out the system and move on.
Mystic Blue said:
Low interest rates and over borrowing got us into this mess. The rate should go up to at least 7.5% asap but they don't have the balls to do it...
Mate - you're not a one man economy.Lift rates now and even the likes of YOU (or how you think you may be) would be suffering.
We need a cut... BADLY.
Totally agree with the OP.
I think the BoE are so transfixed staring at inflation on the dashboard of instruments, they are not looking through the bloody windscreen at the fact that we are heading toward the edge of a cliff...
We need rates down to 4% and we need it now.
Even with a massive rate cut like this, the economy is not going to go crazy because everyone is just too scared to do anything.
Inflationary risks are well overstated in my opinion. In this respect, I am totally in the Blanchflower camp when it comes to the views of the MPC.
I think the BoE are so transfixed staring at inflation on the dashboard of instruments, they are not looking through the bloody windscreen at the fact that we are heading toward the edge of a cliff...
We need rates down to 4% and we need it now.
Even with a massive rate cut like this, the economy is not going to go crazy because everyone is just too scared to do anything.
Inflationary risks are well overstated in my opinion. In this respect, I am totally in the Blanchflower camp when it comes to the views of the MPC.
paul001 said:
As an ex commodities dealer I kind of know a bit about trading markets, or I like to think I do I should say. Oil was always going to come back down to the $100 in the short term that was pretty obvious and we all made handsome profits over the summer but the factors that made it go through $140 in the first place are still all there. By mid next month I would expect to see a big rise from somewhere in the high 80's/low 90's to over $120 by January.
Bloke on Bloomberg now saying it will go down to $60.thehawk said:
paul001 said:
As an ex commodities dealer I kind of know a bit about trading markets, or I like to think I do I should say. Oil was always going to come back down to the $100 in the short term that was pretty obvious and we all made handsome profits over the summer but the factors that made it go through $140 in the first place are still all there. By mid next month I would expect to see a big rise from somewhere in the high 80's/low 90's to over $120 by January.
Bloke on Bloomberg now saying it will go down to $60.
d oil companies will still be ripping us off for petrol.......(sorry Timmy35, just had to be done)
Murcielago_Boy said:
House prices - well, the less said the better.
I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
If inflation isn't a problem, and artificially high house prices were caused by the supply of easy and cheap credit, then why are falling house prices a bad thing? Hell, even first time buyers might be able to get into the market on a reasonable basis, now there's a novelty! Supply and demand are inextricably linked and no market is ultimately sustainable without new people coming in.I think it's safe to say that INFLATION IS NO LONGER A THREAT - and bare in mind, it was always a structural problem - i.e supply side as opposed to demand based. IMO the BoE have been a bit daft in trying to manage a supply side problem by pulling a "demand side" lever - i.e keeping rates high, killing demand while all the while oil-price related inflation cannot be controlled..
Edited by Andy Zarse on Monday 29th September 17:03
Fittster said:
Since when has it been the job of the BoE to protect share prices? I thought the remit was to control inflation.
Who said anything about share prices? You really think the BoE should be worried about inflation in a climate where hundreds of thousands (possibly millions) of people are losing their jobs, asset values of all classes are heading into the abyss and banks are going bust...
and we should be worried about inflation....??? what inflation is there going to be when 6 months from now when the country's on the dole?
Affordable credit isnt just required by the housing sector.
Lowering the interest rates by a sizeable margin will not save the house prices from falling, but it should ease pressure on other consumer debt and on businesses. It would give the country a better fighting chance of spending its way partly out of the mess.
IMHO
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