Originally posted by Masher
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Originally posted by Bagpuss View PostIf rates hit 3.5% we can look forward to 1 euro= 1 pound, at the start of the euro it was approx 1.8 euro=1 pound. How wise we were to stay outside!
We were very wise to stay out. The country has had full control of interest rates and thus its economy which allowed us unprecedented boom conditions. The problem was that we had an incompetent New Lie in charge which has let lending rip, causing the current credit crisis, and which has been constantly raising taxes even in those boom times, which no government should need to do. The government has thrown away such a great opportunity by its own incompetence.
Banks should never have been allowed to lend at the levels that they have and the authorities (HMG,FSA and BofE) should have controlled this by making off-balance sheet lending such as SIVs and CDOs highly restricted to ensure much higher bank liquidity ratios. The authorities have thus contributed to the current crisis and membership of the Euro is a total irrelevance in that respect.
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That is not true. The rate was around 1.5 euros/£Originally posted by Bagpuss View PostIf rates hit 3.5% we can look forward to 1 euro= 1 pound, at the start of the euro it was approx 1.8 euro=1 pound. How wise we were to stay outside!
BOE should be looking after inflation, but as inflation this is the great get out of jail card for indebtedness, it may be relaxing it's stance. or maybe not.
Euro rates will come down later this year so £ will strengthen to 1.35, so could be worth a spread bet.Leave a comment:
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Good to see the BBC doing its stuff on the 6pm news last night. A big picture of 5.25% exploded several times to be replaced by 5%. Presumably this what was done to ram home to the great unwashed what good new this was thanks to their NuLie masters.
Later on for the dropping of the investigation into the dodgy BAE/Saudi arms deal item they showed old footage of Maggie whilst mentioning a Saudi prince "who wasn't featured in that clip".Leave a comment:
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If rates hit 3.5% we can look forward to 1 euro= 1 pound, at the start of the euro it was approx 1.8 euro=1 pound. How wise we were to stay outside!
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interest rates 3% - mortgage rates 9% still?
the bankers have to be paid their millions after all...Leave a comment:
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Bank Rate at 3.5% next year !!!
From the Telegraph:
http://www.telegraph.co.uk/money/mai.../bcncom210.xml
Bank will need to lower interest rates to 3.5pc
By Roger Bootle
Last Updated: 1:34pm BST 10/04/2008
I think that the continued problems in the financial markets and the associated tightening of credit conditions will mean that today’s 0.25pc cut in interest rates to 5pcis another step towards rates eventually falling to 3.5pc.
Admittedly, the latest news on activity has been fairly good. GDP growth is slowing, but not collapsing. The manufacturing sector appears to have enjoyed a surge in activity, while the retail sales figures suggest that consumers have continued to spend.
And the 166,000 rise in employment in the three months to January indicates that the labour market is in rude health. However, the flood of evidence that mortgage lenders are withdrawing products and raising rates in droves suggests that the 2.5pc monthly fall in house prices in March reported by the Halifax could be the tip of the iceberg.
Interestingly, the MPC did not refer to the housing market at all in the statement released alongside its decision, presumably for fear of being accused of targeting asset prices or undermining confidence further. Nonetheless, it is becoming increasingly likely that house prices will fall significantly.
And if the housing market continues to slow at anything like current rates, it is surely only a matter of time before consumers decide to batten down the hatches.
Moreover, the more forward-looking surveys have started to reveal some cracks in the labour market. The danger is a vicious circle of falling employment, lower house prices and weaker consumer spending.
Even after today’s cut, official interest rates are probably still at a level that is acting as a brake on economic activity. Due to the problems in the financial markets that have pushed three month interest rates up to just under 6pc, overall monetary conditions are probably no looser than they were last summer when official interest rates were 5.75pc.
Of course, the MPC has not abandoned its inflation concerns. Indeed, the statement said that “above-target inflation this year could raise inflation expectations so that…inflation would remain above the target”.
This is not too surprising given that the Bank’s own measure of the public’s inflation expectations has already risen to a record high of 3.3pc in February and that the YouGov/Citigroup measure hit 3.6pc in March.
But it is clear that the downside risks to the inflation outlook stemming from a prolonged period of very weak activity – if not an outright recession – are growing relative to the upside risks from cutting interest rates further.
The upshot is that interest rates need to come down considerably further. I expect that rates will fall to 4pc by the end of this year and further to 3.5pc in 2009. And even this won’t be enough to stop GDP growth from slowing to just 1pc or so next year.
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I'm glad somebody else is thinking the same as me !!!
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