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Bank of England Base rate & other news

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    #81
    Bank Rate increased to 0.25%

    Full Report here:

    https://www.bankofengland.co.uk/mone...f32a-113524461


    It is certainly an interesting time to have made the decision to increase the base rate by 0.15 in the midst of a pandemic and also just before Christmas.

    Taken from the report:

    "At this meeting, most members of the Committee judged that an immediate, small increase in Bank Rate was warranted. Although the conditions for tightening set out in November had been met, the decision at this meeting was finely balanced because of the uncertainty around Covid developments. There was some value in waiting for further information on the degree to which Omicron was likely to escape the protection of current vaccines and on the initial economic effects of this new wave. There was, however, also a strong case for tightening monetary policy now, given the strength of current underlying inflationary pressures and in order to maintain price stability in the medium term. The economic impact of the new variant could, in some scenarios, increase these inflationary pressures further. Moreover, maintaining the current monetary policy stance when CPI inflation was materially above the 2% target and the output gap appeared to be closed might cause medium-term inflation expectations to drift up further."

    Comment


      #82
      ""Although the conditions for tightening set out in November had been met, the decision at this meeting was finely balanced because of the uncertainty around Covid developments."

      But now (day after the highest infections) Covid-wise things are very certain, so it's ok to increase rates

      Comment


        #83
        Originally posted by AtW View Post
        ""Although the conditions for tightening set out in November had been met, the decision at this meeting was finely balanced because of the uncertainty around Covid developments."

        But now (day after the highest infections) Covid-wise things are very certain, so it's ok to increase rates

        There is going to be some sort of lockdown on Boxing Day.
        "You’re just a bad memory who doesn’t know when to go away" JR

        Comment


          #84
          Originally posted by SueEllen View Post
          There is going to be some sort of lockdown on Boxing Day.
          There will be riots if Harrods sale is cancelled...

          Comment


            #85
            Originally posted by AtW View Post

            There will be riots if Harrods sale is cancelled...
            Don't they have a ecommerce store?
            "You’re just a bad memory who doesn’t know when to go away" JR

            Comment


              #86
              Originally posted by SueEllen View Post
              Don't they have a ecommerce store?
              Not the same experience, Shirley?

              Comment


                #87
                Originally posted by AtW View Post

                Not the same experience, Shirley?
                This is true. It's a much better one!

                Comment


                  #88
                  An interesting report from the Guardian:

                  https://www.theguardian.com/business...ion-takes-toll

                  The key point from the article is:

                  "Steffan Ball, the chief UK economist at Goldman Sachs, said the MPC would probably vote 9-0 to raise borrowing costs on Thursday, and could lift interest rates to as high as 1.25% by November this year.

                  “We now expect the Bank of England to hike in back-to-back meetings through May, in order to demonstrate to markets and businesses that the MPC is serious about the inflation target,” he said"


                  A raise in the base rate I believe is the sign of an improving economy. The reason the base rate could increase on Thursday is to try and rein in inflation by making borrowing less attractive and instead increase the return on savings.

                  Comment


                    #89
                    Originally posted by Martin@AS Financial View Post
                    instead increase the return on savings.
                    Er, yeah, that isn't going to happen in the same way it happened historically. There is little incentive (for some significant time) for highstreet banks to raise savings rates, even while they increase mortgage rates. That's why bank shares are not a bad punt in the upcoming rate cycle, notwithstanding broader market risks.

                    Comment


                      #90
                      Up to 0.5% as expected, but the 5-4 was unexpected, 4 voting for 0.75%!

                      https://www.bbc.co.uk/news/business-60197463

                      Comment

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