they are taking us for mugs that has alwa been the plan. WB has been pressuring chancellors for sometime to raise interest rates.
Youll own nothing and be happy…
The UK is running out of tools to combat inflation. Perpetual increased level of inflation, it seems.
Is .75 or 1% higher than expected?
They’ve been lower than expected for months.
US rate currently at 4.0%
Are are still 1.75% behind.
Well that’s bad because I’m expecting a 50% increase, the way things have been going.
Bailey proving once again that he is completely out of his depth and 6 months behind.
“And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”
No, none of us thought this. Every economic commentator, everyone with half a brain knew that with inflation at 12%+ the interest rates should have risen far higher in August. Our pathetic CB has consistently increased rates too slowly and then cancelled a rate meeting because of the queen, further delaying a response, all while real interest rates are -10%. Bailey is a joke and needs to go.
They are not raising it fast enough compared to inflation and the only reason foe that is to protect the housing market.
They should have done this ages ago
Now we have to deal with high interest rates after the inflation has already run away
5-6% is normal in every other country , 8% is getting high.
Sweet. Can practically hear the housing market crumble.
I get to remortgage on November 1st. What is the likelihood that I’ll manage to get this done before the 3rd? Would they honour rates from the 1st?
Not popular, but you will need rates to go to at least 10% to kill this inflation.
Recession is inevitable, rip off the band aid, it will be hellish for lots of people, but unless you get aggressive, this will be a lost decade
I have a lot of sympathy for the BoE’s challenge. Their remit is limited – financial stability (ie don’t let the system of banks and investment collapse) and inflation targeting via interest rates.
Thanks to staggeringly stupid conservative policies for 12 years, we have had economic growth that has lagged the rest of Europe or the G7, we have had lower productivity than our peers and wages have fallen in real terms.
It is the job of the BoE to curb inflation and the only tool it has is interest rates. This a horrific a.l’y crude tool for the job and in the circumstances that the last ten years of government policy have created.
A significant proportion of inflation is due to rising energy costs and rising good costs. These are due to global supply issues. Interest rates is an incredibly crude tool to curb inflation caused by those type of forces.
When inflation is being caused by us all having too much money and everyone paying more for ready meals at Tesco, buying too many takeaways, or too many expensive cars then an interest rates rise squeezes people and they pull back on that kind of spending.
When inflation is because the global price of energy has soared and imports of food are more expensive because of supply chain problems and Brexit, then what you are actually trying to make people do is spend less on energy and food.
Raising interest rates can make that happen, but it means business failing, higher unemployments and increased poverty… and a house price crash.
As I say, I don’t blame the BoE for this, they have limited tools and a simple target.
There are no more cuts to make without destroying public service and people’s lives. There is no more pretending that the prosperity will trickle down, the country has been waiting for more than a decade. There are no more shallow trinkets to pull out of the hat (Help to Buy etc ). There are no more distracting stupid ideas like Brexit to fool people into thinking there is some ‘bright tomorrow’.
They have completely run out of road.
The UK is about to reap the whirlwind of 12 years of Tory incompetence.
I’m not an economist, but it seems like almost everyone in this thread is saying interest rates should have gone further and been done sooner, but I still don’t see why that would do anything to fix supply-led inflation. Price rises are because of energy shortages and supply chain issues, not people spending too much.
Dont worry everyone you can get a 2% savings account!
Anyone else think something bigger than 2008 is coming?
Ah-hah! We caught you off guard! We expected to be fucked don’t you think this was unexpected! No sir not this time
This is beyond stupid.
Using rates to try and reduce inflation is only used when you have a population spending excess cash on goods. A cash rich population speeding to much on non essential things causing a spike in demand.
This time it’s caused by rocketing fuel prices. Continually jacking up a rate in a near recession won’t stop inflation caused by fuel. I doubt people can use any less than they are now. Likewise with luxury goods judging by the latest reports we are all buying own brand foods.
In affect they are saying. We will make them pay more for their homes/loans they will then have to stop heating or eating that will in turn bring inflation down.
Unless they are banking in a higher rate attracts investors and causes the pound to rise vs the dollar meaning goods we buy will be cheaper.
Seeing as we have a new pm and chancellor every other week you will have to be a brave person to dump your money in the pound
I suspect some of the decision will be based upon how markets react on Monday. Unfortunately, I suspect Monday will be quite brutal and the BOE will be forced into 1.25% rise.
However, markets have reached the conclusion that Truss will bring down the economy, and frankly, until she is gone we’re going to have a state of crisis.
Can somebody ELI5, how giving banks more money reduces inflation? Barclays, Halifax, et al. are raking it in.
Mortgages should be offered at 2% to all single-home buyers by the government. Second, third, and so on should be at a much higher rate. A roof should not be seen as a profit maker.
Initial headline says ‘could be’ but actual headline says ‘will be’. Which is correct???
Who would have thought shutting down the planet for 2+ years for a glorified flu and getting our energy polices from a 14 year old girl with learning difficulties would have serious economic consequences.
If only they’d need some warning.
It’s an investment when house prices are going up, but a charity case when they’re coming down
23 comments
they are taking us for mugs that has alwa been the plan. WB has been pressuring chancellors for sometime to raise interest rates.
Youll own nothing and be happy…
The UK is running out of tools to combat inflation. Perpetual increased level of inflation, it seems.
Is .75 or 1% higher than expected?
They’ve been lower than expected for months.
US rate currently at 4.0%
Are are still 1.75% behind.
Well that’s bad because I’m expecting a 50% increase, the way things have been going.
Bailey proving once again that he is completely out of his depth and 6 months behind.
“And, as things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”
No, none of us thought this. Every economic commentator, everyone with half a brain knew that with inflation at 12%+ the interest rates should have risen far higher in August. Our pathetic CB has consistently increased rates too slowly and then cancelled a rate meeting because of the queen, further delaying a response, all while real interest rates are -10%. Bailey is a joke and needs to go.
https://www.reddit.com/r/unitedkingdom/comments/vdje9b/fifth_consecutive_hike_as_interest_rate_raised_to/ickle3t/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3
They are not raising it fast enough compared to inflation and the only reason foe that is to protect the housing market.
They should have done this ages ago
Now we have to deal with high interest rates after the inflation has already run away
5-6% is normal in every other country , 8% is getting high.
Sweet. Can practically hear the housing market crumble.
I get to remortgage on November 1st. What is the likelihood that I’ll manage to get this done before the 3rd? Would they honour rates from the 1st?
Not popular, but you will need rates to go to at least 10% to kill this inflation.
Recession is inevitable, rip off the band aid, it will be hellish for lots of people, but unless you get aggressive, this will be a lost decade
I have a lot of sympathy for the BoE’s challenge. Their remit is limited – financial stability (ie don’t let the system of banks and investment collapse) and inflation targeting via interest rates.
Thanks to staggeringly stupid conservative policies for 12 years, we have had economic growth that has lagged the rest of Europe or the G7, we have had lower productivity than our peers and wages have fallen in real terms.
It is the job of the BoE to curb inflation and the only tool it has is interest rates. This a horrific a.l’y crude tool for the job and in the circumstances that the last ten years of government policy have created.
A significant proportion of inflation is due to rising energy costs and rising good costs. These are due to global supply issues. Interest rates is an incredibly crude tool to curb inflation caused by those type of forces.
When inflation is being caused by us all having too much money and everyone paying more for ready meals at Tesco, buying too many takeaways, or too many expensive cars then an interest rates rise squeezes people and they pull back on that kind of spending.
When inflation is because the global price of energy has soared and imports of food are more expensive because of supply chain problems and Brexit, then what you are actually trying to make people do is spend less on energy and food.
Raising interest rates can make that happen, but it means business failing, higher unemployments and increased poverty… and a house price crash.
As I say, I don’t blame the BoE for this, they have limited tools and a simple target.
There are no more cuts to make without destroying public service and people’s lives. There is no more pretending that the prosperity will trickle down, the country has been waiting for more than a decade. There are no more shallow trinkets to pull out of the hat (Help to Buy etc ). There are no more distracting stupid ideas like Brexit to fool people into thinking there is some ‘bright tomorrow’.
They have completely run out of road.
The UK is about to reap the whirlwind of 12 years of Tory incompetence.
I’m not an economist, but it seems like almost everyone in this thread is saying interest rates should have gone further and been done sooner, but I still don’t see why that would do anything to fix supply-led inflation. Price rises are because of energy shortages and supply chain issues, not people spending too much.
Dont worry everyone you can get a 2% savings account!
Anyone else think something bigger than 2008 is coming?
Ah-hah! We caught you off guard! We expected to be fucked don’t you think this was unexpected! No sir not this time
This is beyond stupid.
Using rates to try and reduce inflation is only used when you have a population spending excess cash on goods. A cash rich population speeding to much on non essential things causing a spike in demand.
This time it’s caused by rocketing fuel prices. Continually jacking up a rate in a near recession won’t stop inflation caused by fuel. I doubt people can use any less than they are now. Likewise with luxury goods judging by the latest reports we are all buying own brand foods.
In affect they are saying. We will make them pay more for their homes/loans they will then have to stop heating or eating that will in turn bring inflation down.
Unless they are banking in a higher rate attracts investors and causes the pound to rise vs the dollar meaning goods we buy will be cheaper.
Seeing as we have a new pm and chancellor every other week you will have to be a brave person to dump your money in the pound
I suspect some of the decision will be based upon how markets react on Monday. Unfortunately, I suspect Monday will be quite brutal and the BOE will be forced into 1.25% rise.
However, markets have reached the conclusion that Truss will bring down the economy, and frankly, until she is gone we’re going to have a state of crisis.
Can somebody ELI5, how giving banks more money reduces inflation? Barclays, Halifax, et al. are raking it in.
Mortgages should be offered at 2% to all single-home buyers by the government. Second, third, and so on should be at a much higher rate. A roof should not be seen as a profit maker.
Initial headline says ‘could be’ but actual headline says ‘will be’. Which is correct???
Who would have thought shutting down the planet for 2+ years for a glorified flu and getting our energy polices from a 14 year old girl with learning difficulties would have serious economic consequences.
If only they’d need some warning.
It’s an investment when house prices are going up, but a charity case when they’re coming down