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Post by zanygame on Jun 29, 2023 6:28:49 GMT
The bank of England explained on Radio 4 yesterday that the reason their predictions for inflation were out was that they didn't notice food prices had risen so high WTF!
They also don't understand why raising the interest rates on those young people with mortgages who already don't have any spare cash is not reducing spending.
I think they need some new staff.
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Post by jonksy on Jun 29, 2023 6:33:06 GMT
The bank of England explained on Radio 4 yesterday that the reason their predictions for inflation were out was that they didn't notice food prices had risen so high WTF! They also don't understand why raising the interest rates on those young people with mortgages who already don't have any spare cash is not reducing spending. I think they need some new staff. Perhaps the BOE used the same advisers as the ECO zealots. |
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Post by Pacifico on Jun 29, 2023 6:36:04 GMT
The BoE have been a disaster - with their ridiculous extended QE, their failed modelling that thought inflation was transitory and their way to late responses to inflation becoming embedded, they have caused much of the problems we have now.
Was giving them independence such a wise idea? - their performance suggests not.
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Post by johnofgwent on Jun 29, 2023 6:37:34 GMT
The bank of England explained on Radio 4 yesterday that the reason their predictions for inflation were out was that they didn't notice food prices had risen so high WTF! They also don't understand why raising the interest rates on those young people with mortgages who already don't have any spare cash is not reducing spending. I think they need some new staff. the reality is Brown washed his hands of responsibility for inflation by giving the bank of england the job and they have only one tool at their disposal. It is the classic case of ‘the flogging shall continue until mirale improves’ |
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Post by zanygame on Jun 29, 2023 6:38:42 GMT
The BoE have been a disaster - with their ridiculous extended QE, their failed modelling that thought inflation was transitory and their way to late responses to inflation becoming embedded, they have caused much of the problems we have now. Was giving them independence such a wise idea? - their performance suggests not. Current performance certainly suggests not. Bring back Mark Carny. |
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Post by zanygame on Jun 29, 2023 6:41:40 GMT
The bank of England explained on Radio 4 yesterday that the reason their predictions for inflation were out was that they didn't notice food prices had risen so high WTF! They also don't understand why raising the interest rates on those young people with mortgages who already don't have any spare cash is not reducing spending. I think they need some new staff. the reality is Brown washed his hands of responsibility for inflation by giving the bank of england the job and they have only one tool at their disposal. It is the classic case of ‘the flogging shall continue until mirale improves’ But they did a pretty good job for 15 years. So I suggest its the quality of the people running it that has changed. A cynic might think they have raised interest rates to line the pockets of the rich before this Tory government get kicked out. |
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Post by johnofgwent on Jun 29, 2023 6:54:15 GMT
the reality is Brown washed his hands of responsibility for inflation by giving the bank of england the job and they have only one tool at their disposal. It is the classic case of ‘the flogging shall continue until mirale improves’ But they did a pretty good job for 15 years. So I suggest its the quality of the people running it that has changed. A cynic might think they have raised interest rates to line the pockets of the rich before this Tory government get kicked out. i disagree. The interest rates were historically low because for 20 years after Brown’s failure to wake up and see the iceberg until Lehman Brothers brought attention to it by being crushed by it, the UK has been in a depression. Neither the historic low nor the return of the repo man now are controlled by the bank, they are just reacting using the only tool they have. |
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Post by sheepy on Jun 29, 2023 6:54:45 GMT
Maybe the CIA or MI6 should visit Zany and tell him who he is? Just to show how nervous they are.
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Post by Pacifico on Jun 29, 2023 6:58:08 GMT
The BoE have been a disaster - with their ridiculous extended QE, their failed modelling that thought inflation was transitory and their way to late responses to inflation becoming embedded, they have caused much of the problems we have now. Was giving them independence such a wise idea? - their performance suggests not. Current performance certainly suggests not. Bring back Mark Carny. Why? - he was running the show when their errors started ... |
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Post by steppenwolf on Jun 29, 2023 12:42:43 GMT
It's too simplistic to blame the BoE for everything. Andrew Bailey is obviously useless but the problems that we have have been caused by politicians.
Plainly putting up interest rates now will have little direct effect on inflation but the market has already decided that the UK is in such a mess (borrowing well over 100% of GDP) that they're pricing 2 year guilts at over 5% - and going up. So the BoE can't really leave interest rates much below that or the banks will withdraw lending to the UK which would be disastrous.
Of course the reason why the borrowing is so high is because the BoE has issued so much QE (£800 billion for Brown's debacle and £400 billion for Sunak's Covid debacle). That was way too much money. But the BoE were undoubtedly under pressure from the politicians to bail them out. If they hadn't bought govt debt on this scale then we would have suffered the pain a few years ago. As it is we're finally paying for the years of living beyond our means and it will be painful.
But other countries that have our level of debt have been going through this pain for years - like Greece and Italy. We delayed our pain by printing money but the day of reckoning was always going to come. Of course our politicians will try to blame other people but fundamentally it was Brown and Sunak who screwed up.
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Post by zanygame on Jun 29, 2023 13:13:57 GMT
But they did a pretty good job for 15 years. So I suggest its the quality of the people running it that has changed. A cynic might think they have raised interest rates to line the pockets of the rich before this Tory government get kicked out. i disagree. The interest rates were historically low because for 20 years after Brown’s failure to wake up and see the iceberg until Lehman Brothers brought attention to it by being crushed by it, the UK has been in a depression. Neither the historic low nor the return of the repo man now are controlled by the bank, they are just reacting using the only tool they have. That was lending in America remember? The bank of England don't control their interest rates nor their sub prime lending. |
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Post by zanygame on Jun 29, 2023 13:19:38 GMT
Current performance certainly suggests not. Bring back Mark Carny. Why? - he was running the show when their errors started ... I disagree all seemed well until Bailey took over. |
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Post by zanygame on Jun 29, 2023 13:23:51 GMT
It's too simplistic to blame the BoE for everything. Andrew Bailey is obviously useless but the problems that we have have been caused by politicians. Plainly putting up interest rates now will have little direct effect on inflation but the market has already decided that the UK is in such a mess (borrowing well over 100% of GDP) that they're pricing 2 year guilts at over 5% - and going up. So the BoE can't really leave interest rates much below that or the banks will withdraw lending to the UK which would be disastrous. Of course the reason why the borrowing is so high is because the BoE has issued so much QE (£800 billion for Brown's debacle and £400 billion for Sunak's Covid debacle). That was way too much money. But the BoE were undoubtedly under pressure from the politicians to bail them out. If they hadn't bought govt debt on this scale then we would have suffered the pain a few years ago. As it is we're finally paying for the years of living beyond our means and it will be painful. But other countries that have our level of debt have been going through this pain for years - like Greece and Italy. We delayed our pain by printing money but the day of reckoning was always going to come. Of course our politicians will try to blame other people but fundamentally it was Brown and Sunak who screwed up. I agree with much of this, but I don't see a way out of the mess that doesn't involve the whole UK agreeing to a major downward adjustment in the standard of living. We have very little mineral asset and not much spare land so not much to fall back on. How we got here goes all the way back to our expectations when we had an empire. |
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Post by Pacifico on Jun 29, 2023 14:27:09 GMT
Why? - he was running the show when their errors started ... I disagree all seemed well until Bailey took over. Bailey only the got the job in 2020 - it was Carney who implemented the low base rate policy and massive QE since 2009. He inherited the structural problems that Carney created - although I do accept he failed to do anything about them. |
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Post by steppenwolf on Jun 29, 2023 14:49:26 GMT
It's too simplistic to blame the BoE for everything. Andrew Bailey is obviously useless but the problems that we have have been caused by politicians. Plainly putting up interest rates now will have little direct effect on inflation but the market has already decided that the UK is in such a mess (borrowing well over 100% of GDP) that they're pricing 2 year guilts at over 5% - and going up. So the BoE can't really leave interest rates much below that or the banks will withdraw lending to the UK which would be disastrous. Of course the reason why the borrowing is so high is because the BoE has issued so much QE (£800 billion for Brown's debacle and £400 billion for Sunak's Covid debacle). That was way too much money. But the BoE were undoubtedly under pressure from the politicians to bail them out. If they hadn't bought govt debt on this scale then we would have suffered the pain a few years ago. As it is we're finally paying for the years of living beyond our means and it will be painful. But other countries that have our level of debt have been going through this pain for years - like Greece and Italy. We delayed our pain by printing money but the day of reckoning was always going to come. Of course our politicians will try to blame other people but fundamentally it was Brown and Sunak who screwed up. I agree with much of this, but I don't see a way out of the mess that doesn't involve the whole UK agreeing to a major downward adjustment in the standard of living. It doesn't have to be the whole of the UK. The printing of money basically propped up asset prices and helped people who had borrowed to invest in property. It didn't do much for those who had no money or assets. We can't print any more money and we're stuck with much higher interest rates for the foreseeable future. So asset prices will stagnate or go down and those who have borrowed a lot will catch a cold. But those who haven't overborrowed and don't have a lot invested in property will actually be better off, because assets will be cheaper. I hate to say it but it was always obvious that people were borrowing far too much in this country and that interest rates were going to go up. Those who have been caught out are in for a tough time and there simply isn't any way of avoiding that. |
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