| Interest rates 11:45 - Jun 16 with 1098 views | portmanking |
Do we think a rise to 1.25% or even 1.5%-2% is going to do ANYTHING to curb this inflation?
I totally get that rate rises are needed when inflation is rampant due to an overheated economy, but this inflation is largely of Mr Putin's making, not economic prosperity for all.
Higher rates also mean higher borrowing costs which will cripple households in a double whammy effect with higher energy/food prices. I don't see the sense in the BoE right now - far too reactionary for my liking. |  | | |  |
| Interest rates on 11:49 - Jun 16 with 1075 views | clive_baker |
Yep, it's not driven by demand that needs cooling down, I don't think people are rushing out to take credit for a new car, so I can't see that interest rate changes are going to make much difference.
What it will do I suppose is it will give the BOE somewhere to go with interest rates in a couple of years when we've been through a technical recession and economies globally are on their arse. Once that's bottomed out, they can drop slightly to try and instigate consumer confidence and consumer spending. Don't really have much wiggle room when they're sat at 1%. |  |
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| Interest rates on 11:59 - Jun 16 with 1043 views | ElderGrizzly |
Raising interest rates will have zero effect on inflation in the traditional sense. It will merely push us into recession, if we aren't already there.
The BoE admitted that openly last month.
Markets are betting on rates being 2.5% in 12 months time but will then begin to fall again. |  | | |
| Interest rates on 12:07 - Jun 16 with 1001 views | portmanking |
| Interest rates on 11:59 - Jun 16 by ElderGrizzly |
Raising interest rates will have zero effect on inflation in the traditional sense. It will merely push us into recession, if we aren't already there.
The BoE admitted that openly last month.
Markets are betting on rates being 2.5% in 12 months time but will then begin to fall again. |
I don't understand why we have to crash the economy though?
As clive_baker said, it's not like people are already getting their cheque books out for lavish spends. We're all tightening our belts, from what I can see. That alone should be enough to see inflation flatten out in the course of the next quarter. | | | |
| Interest rates on 12:21 - Jun 16 with 953 views | Keno |
| Interest rates on 12:07 - Jun 16 by portmanking |
I don't understand why we have to crash the economy though?
As clive_baker said, it's not like people are already getting their cheque books out for lavish spends. We're all tightening our belts, from what I can see. That alone should be enough to see inflation flatten out in the course of the next quarter. |
There are at least 2 aspects to this.
Firstly interests rates have been kept artificially low since the financial crash and there is a need to wean the economy off that
Secondly inflation is normally driven by demand outpacing supply so more money chases goods increasing prices.This inflation is created by issues with supply being scare and thus prices have risen.
Raising interest has the 'hope' of bringing demand down to the level of supply and those stabilising prices but there is real risk it will simply double down on the risk of recession. |  |
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| Interest rates on 12:31 - Jun 16 with 918 views | portmanking |
| Interest rates on 12:21 - Jun 16 by Keno |
There are at least 2 aspects to this.
Firstly interests rates have been kept artificially low since the financial crash and there is a need to wean the economy off that
Secondly inflation is normally driven by demand outpacing supply so more money chases goods increasing prices.This inflation is created by issues with supply being scare and thus prices have risen.
Raising interest has the 'hope' of bringing demand down to the level of supply and those stabilising prices but there is real risk it will simply double down on the risk of recession. |
But in rising interest rates, they're effectively adding fuel to the flames by making money MORE expensive too?
Demand isn't outpacing supply because we're all rich, supply has plunged so badly - and that's totally out of the control of economies. If they levelled with the people and said that inflation would be artificially high for 18 months due to the Ukraine war, wouldn't most people rather have temporary inflation?
Weaning the economy off? I don't see how this generation can exist with a base rate of anything higher than 2%.
Just feels like BoE are taking a traditional approach to a very non-traditional scenario. | | | |
| Interest rates on 12:35 - Jun 16 with 899 views | suffolkpoker |
With inflation currently going up and the interest rate is still low., its good to have 'good debt.' Inflation will increase your assests agaisnt your loan to value.
obviously pay any bad debt off first, with high interest rates. |  |
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| Interest rates on 12:38 - Jun 16 with 884 views | Churchman |
| Interest rates on 11:59 - Jun 16 by ElderGrizzly |
Raising interest rates will have zero effect on inflation in the traditional sense. It will merely push us into recession, if we aren't already there.
The BoE admitted that openly last month.
Markets are betting on rates being 2.5% in 12 months time but will then begin to fall again. |
Agree with this.
Inflation is largely being driven by supply chain issues, especially energy where the price of it has to be fed through to the cost of just about everything in the coming months. A recession is inevitable. |  | | |
| Interest rates on 12:44 - Jun 16 with 862 views | Keno |
| Interest rates on 12:31 - Jun 16 by portmanking |
But in rising interest rates, they're effectively adding fuel to the flames by making money MORE expensive too?
Demand isn't outpacing supply because we're all rich, supply has plunged so badly - and that's totally out of the control of economies. If they levelled with the people and said that inflation would be artificially high for 18 months due to the Ukraine war, wouldn't most people rather have temporary inflation?
Weaning the economy off? I don't see how this generation can exist with a base rate of anything higher than 2%.
Just feels like BoE are taking a traditional approach to a very non-traditional scenario. |
exactly the point I trying to make | |
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| Interest rates on 12:53 - Jun 16 with 840 views | portmanking |
| Interest rates on 12:38 - Jun 16 by Churchman |
Agree with this.
Inflation is largely being driven by supply chain issues, especially energy where the price of it has to be fed through to the cost of just about everything in the coming months. A recession is inevitable. |
Let's not forget the BoE's mammoth quantitative easing programme which is equally to blame as Putin. The BoE have got things badly wrong IMO. | | | |
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