The Official DOOM: biggest interest rate rise in 27 years

[AtW]

"Bailey warns of biggest interest rate rise in 27 years as he defends Bank’s independence

The Bank of England is poised to unveil the biggest increase in interest rates for almost 30 years, Governor Andrew Bailey suggested as he hit back against a barrage of attacks by Tory leadership candidates.

Mr Bailey said rate-setters have put a 50 basis point increase “on the table” for the next meeting in August, the strongest signal yet that the Bank will step up efforts to bring inflation down from a 40-year high.

The Governor last night also launched a staunch defence of the Bank of England, warning that its independence is “now more important than ever” following unprecedented criticism from Prime Minister hopefuls.

The Bank’s Monetary Policy Committee has already voted for five back-to-back rises after inflation hit a 40-year high of 9.1pc, taking the base rate from 0.1pc to a post-financial crisis high of 1.25pc. "

https://www.telegraph.co.uk/business...r-russian-gas/

Rates might increase by 40% in one go, DOOOOOMED!!!

[Fraidycat]

Last few times when there was an economic recession they cut interest rates to save the day, this time they are going to raise rates to cause a recession.

[Whorty]

Last few times when there was an economic recession they cut interest rates to save the day, this time they are going to raise rates to cause a recession.

Don't worry fella, you're on thousands of pounds per day, you're raking it in, you'll be fine.

[jamesbrown]

50 whole basis points? Wake me up when they do 100 basis points.

[Fraidycat]

Bank of Canada recently did 100 bips taking rates to 2.5%

US is going to do 75 bips next week taking rates to 2.5%.

UK which has the highest inflation now at 9.4%, is only doing 50, taking rates to just 1.75%.

Why are they dragging their feet?

[hugebrain]

Bank of Canada recently did 100 bips taking rates to 2.5%

US is going to do 75 bips next week taking rates to 2.5%.

UK which has the highest inflation now at 9.4%, is only doing 50, taking rates to just 1.75%.

Why are they dragging their feet?

Traditionally, the interest rate should be just a bit higher than inflation, so an 8% rise is needed.

They are dragging their feet because they intend to cause an economic collapse, a great reset, and then build back better. To be fair they’ve been pretty open about it. You will eat bugs and you will be happy!

[Whorty]

Bank of Canada recently did 100 bips taking rates to 2.5%

US is going to do 75 bips next week taking rates to 2.5%.

UK which has the highest inflation now at 9.4%, is only doing 50, taking rates to just 1.75%.

Why are they dragging their feet?

High interest rates, among other things, could hit confidence and raise mortgage costs. This could impact house prices. No one wants that. We don't want the plebs getting on the housing ladder.

[dsc]

50 whole basis points? Wake me up when they do 100 basis points.

No idea why they are going so slow, we should be easily at 4-5% for it to have any effect on inflation, bear in mind it takes 3-4 quarters to see the effects in the first place.

As for recession, it's probably the only sure way to battle double digit inflation, which is why you should never really allow it get so high. Wait till Jan 2023 when energy prices are going to go through the roof again and pretty much everything will be impacted. This is a sh*t storm of monumental proportions.

[jamesbrown]

No idea why they are going so slow

Because they are small c conservative. Even when a radical outcome smacks them in the face, they tend to "look through" it

[Whorty]

As a lot of the inflation is driven by the fuel hikes, they're probably hoping prices will stabilise and start to reduce thus bringing down inflation. Timing will be key, but we'll only know with hindsight if they got it right or not.