Interest Rates to rise this week?



Fletch said:
There will be political pressure to lower but expect the BOE to hold them , if inflation dips again then that may then trigger a small cut , and can see that followed by couple more cuts during year , providing nothing unexpected (covid/war scenarios ) triggered inflation to rise again
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The government will be desperate for rate cuts to show they’re “winning” the battle against inflation and that the economy is on the up.
HellsBells said:
The Bank of England's job isn't to stimulate the economy though. It's to control inflation.
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I’d suggest economic stimulation is one of their functions, though that would come through interest rate setting, control of inflation etc.
 
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Drifter said:
The government will be desperate for rate cuts to show they’re “winning” the battle against inflation and that the economy is on the up.

I’d suggest economic stimulation is one of their functions, though that would come through interest rate setting, control of inflation etc.
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Control of inflation is directly in opposition to stimulation of the economy though. You can’t give them the goal to do both.
 
HellsBells said:
Control of inflation is directly in opposition to stimulation of the economy though. You can’t give them the goal to do both.
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It’s finding the right balance surely? You can try to keep inflation to a target, say 2% (and “controlled”), while keeping rates to a level where individuals and business still feel they can spend/borrow, thus keeping the economy stimulated without it overheating.
They might not be able to do either if they get their policies wrong.
 
Crazy how they believe controlling inflation is to put interest rates up.
Inflation this time is specifically because of certain items and not people on a spend bender.
It doesn’t even affect the entire population so how the hell is it a controlling tool.
BOE should have had the balls to reduce rates by 0.25 to at least signal an upturn, but no let’s wait til the USA do it first eh.
Growth comes when people have disposable income without rising bills.
It’s all bollocks in my humble opinion 😉
 
Would increasing taxes not have been a more useful tool than interest rate rises to take money out the system to control inflation?
Same result, people have less to spend but with taxes it would have reduced the national debt instead of boosting bank profits.
 
Qwerty said:
Would increasing taxes not have been a more useful tool than interest rate rises to take money out the system to control inflation?
Same result, people have less to spend but with taxes it would have reduced the national debt instead of boosting bank profits.
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No because raising taxes reduces productivity and shifts demand in (over) simplified terms
 
Boris Bear said:
No because raising taxes reduces productivity and shifts demand in (over) simplified terms
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Under investment is the main driver in poor UK productivity. Why would personal taxes affect company investment.
For the individual, they'd be better off paying £50 a month more in tax than paying £150 extra mortgage.
 
Qwerty said:
Under investment is the main driver in poor UK productivity. Why would personal taxes affect company investment.
For the individual, they'd be better off paying £50 a month more in tax than paying £150 extra mortgage.
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Because the incentive to work is less (arguably)
 

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