Interest rates going up soon...

[mondeoman]

Is this for real or just grand-standing?
http://www.bbc.co.uk/news/business-27825643

Are we really seeing the green shoots of recovery or is this off the back of the London housing boom?

[mondeoman]

okgo said:

Good bit in the Standard tonight on this. Apparently prices in 10 London boroughs have fallen and borrowing is down. I should think the adjustment period must soon start. But it may take some time to cleanse the market of all the overpriced crap currently sitting on there.

Annoyingly estate agents have got tactics and rather than reduce properties on the web they remove and relist at a new price and there is no way to see what they were asking for it in the first place unless you have a good memory.

If thats the case, then is there really any need to increase rates at all?

[mondeoman]

Aren't interest rates a blunt weapon to soak up "spare"spending capacity? If inflation is driven up by rising costs of the basics (food and fuel), which drives wage demands, then there isn't an increase in spare capacity, so no reason to increase rates surely?

[mondeoman]

Fuel prices rose during September, are now going back down.

Where is the wage inflation, the real driver of inflation rates. No wage rises, no one can afford interest rate rises, no matter what figure inflation hits.