When will interest rates rise?

[BrilloPad]

Looks like never :-

Interest rates could stay 'glued' to the floor, admits Bank's chief economist - Telegraph

Cautious consumers and businesses could mean that interest rates stay stuck at 0.5pc for longer

Andy Haldane, who sits on the Bank’s committee of interest rate setters, said that despite “vigorous attempts to dislodge them”, rates have remained stuck at unprecedentedly low levels across major economies.

That would be because QE has only helped the rich who have put their money offshore.

If they actually pumped money into the real economy then proper activity might return. At least once household indebtedness drops below 100%.....

[Zero Liability]

Probably much later than they should...

The world is defenceless against the next financial crisis, warns BIS - Telegraph

[jamesbrown]

I wouldn't necessarily listen to Andy Haldane. He's a well-known dove on the committee, and it's one member one vote afterall. Last time he raised the prospect of a cut, he was slapped down by Carney a couple of days later, and the same will likely happen again. Early next year seems likely.... unless our insipid recovery (debt-fueled housing boom) starts to idle again.

[Martin@AS Financial]

Martin Weale (MPC member) has signalled he believes the time has come to consider increasing interest rates:


MPC member says prepare for rate rise | News | Mortgage Strategy

[jamesbrown]

Martin Weale (MPC member) has signalled he believes the time has come to consider increasing interest rates:


MPC member says prepare for rate rise | News | Mortgage Strategy

Likewise, I wouldn't pay much attention to Martin Weale.

[Martin@AS Financial]

Likewise, I wouldn't pay much attention to Martin Weale.

To be fair, he has been on the whole pushing for a rate rise consistently.

[BrilloPad]

I wouldn't necessarily listen to Andy Haldane. He's a well-known dove on the committee, and it's one member one vote afterall. Last time he raised the prospect of a cut, he was slapped down by Carney a couple of days later, and the same will likely happen again. Early next year seems likely.... unless our insipid recovery (debt-fueled housing boom) starts to idle again.

Likewise, I wouldn't pay much attention to Martin Weale.

Who should I listen to? AndyW?

[jamesbrown]

To be fair, he has been on the whole pushing for a rate rise consistently.

Yep, he only backtracked earlier this year, along with McCafferty, after lower than anticipated inflation. You have to listen to what the centrists are saying to get any real sense of what might happen, and even then it's anyone's guess (i.e. probably better to look at market pricing). In the US, for example, which is analogous in some ways, the market is consistently more dovish than the dot plots from the Fed. Someone is wrong, and it probably isn't the market.

[jamesbrown]

Who should I listen to? AndyW?

You might as well.

[Zero Liability]

I wouldn't be surprised if they awaited the Fed to make the first move, in case it causes any shockwaves, as then it can bear the blame. That said, any rate increases are probably going to be so low as to be inconsequential. Will they risk it?

The other major economies are still in - some just entering - a state of monetary accommodation, but the Fed is ultimately at the epicentre of the financial universe.