BOE Sees Case for Keeping Record-Low Rate Beyond 7% Jobless

[Martin@AS Financial]

There are currently so many mixed opinions on when the first base rate increase will be. In yesterdays news, reports were saying that there will almost certainly be a rate increase to 1% in 2015. However this is not guaranteed.

BOE Sees Case for Keeping Record-Low Rate Beyond 7% Jobless - Bloomberg

[DimPrawn]

Will they stop printing money before they raise interest rates?

[centurian]

The "case" is that "forward guidance" is a complete load of tulip. They deliberately set it to be something which they never thought they would have to deal with anytime soon (7% unemployment).

Now it looks like it could happen a lot sooner, they need to find a way of backtracking on it - without admitting that their forward guidance was total BS in the first place.

This is the economics equivalent of Lib Dems student fees promise - suddenly having to deliver on something which you never thought would happen in the short term.

[petergriffin]

If they don't keep interest rates artificially low, the whole financial system will go belly up, which is not necessarily a bad thing.