Tuesday, 16 September 2008

Will the BOE cut rates?


Logic would suggest, that faced with a collapse in the credit markets and also in the money markets the right decision to be made would be to cut interest rates. Maybe not by 1% at once, but certainly by a 0.5% by the year end.

Yet in Mervyn King's letter to Alistair Darling today, it appears that the Bank of England has become more hawkish about inflation. Hedging its bet by saying that inflation will soon peak at 5%, but also noting how high above target this is.

There seems to be a determination to keep inflation down, even as we enter a recession. Good news for savers, less good for borrowers. A high risk move, but I do trust the BOE members intelligence and integrity; let's hope they are lucky too.

11 comments:

Ed said...

One of the "lessons" we need to learn is that inflation-only targeting isn't ideal. Perhaps we can devise some system which includes overall stability and not allowing bubbles to develop. The central banks got the low-inflation era wrong, let's hope they don't get the correction wrong as well.

Time for the chancellor to make some quick changes to the regime?

CityUnslicker said...

What you mean Labour do something other than in-fighting...it seems doubtful at the moment BE.

Ed said...

Maybe Mr King could do something to precipitate things then, such as cutting rates?

patently said...

I don't care whether they have any intelligence or integrity.

So long as they have luck.

Bill Quango MP said...

Inflation was pushed up by the energy price rises of 35 - 40 % for most households and businesses last month. Mr King must know this?
Those rises are very unlikely to be repeated next month [ thank the stars].

The retail numbers are declining and only the mid-lower market supermarkets are doing well enough to warrant a windfall tax.

Poundland / ideal shopping /French connection / John Lewis / Dunelm Mill/ Debenhams all reported in the last few weeks. All down trading, but as yet not disastrous.

A boost for the economy is needed and needed soon, or some of the "hanging on's" will fall off.

Bill Quango MP said...

O/T But how is the government allowed to just sack people from positions? Without a hearing,a representative, a disciplinary hearing by a non interested party, a court case,a presentation of evidence, a mitigation hearing, a discriminatory screening interview, a compensation tribunal, union representation, discussions with an employment lawyer etc?
You can't just go around chucking out forestry commissioners because you don't what they say.

Haven't the PLP heard of the EU?
Social Chapter, employment rights, unfair dismissal? Come on Gordon, you only signed it a few months ago in Lisbon, you must remember.

It takes at least a year to dismiss anyone from anything no matter how useless they are.
Surely that's the real reason Mr Brown is still there?

Man in a Shed said...

Interest rates, especially when income tax is added, are neutral to negative now. Drop them and its savings destruction time.

Back to the 70s !

AntiCitizenOne said...

Blue Eyes.

The regulator needs to increase reserve ratios in response to credit creation and interest rates in response to credit demand.

We don't currently do the first.

Anonymous said...

LIBOR is at 6.5% so why the hell would they reduce interest rates at the BoE? The BoE is now redundant. The market has de-coupled itself from central interest rate setting and is finding its own level, taking your own mortgage with it. Fact is that the banks need to put interest rates at about 10% to get a decent return on their investments without forcing ever more debt onto third parties - because they CAN'T froce more debt on third parties.

The only thing the BoE would achieve by lowering interest rates at the lender of last resort would be to act as a source of incredibly cheap finance for the banks with huge holes in their balance sheet while they themselves are charging huge rates of interest on their loans. But even that won't work because the banks will merely be moving their debt arond and their balance sheets will still be shot to pieces.

A lot of people are going to lose their homes. A lot of people are going to lose their jobs. Forget about what you have known about finance over the last 30 years. We are in an entirely different game now. The macro-economy is going to take a huge stick and beat us with it for the next five years and there is absolutely nothing anyone can do about it.

Glum, yes, but it's the truth.

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,