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BoE cuts base interest rate to 0.25%



Titanic

Super Moderator
Helpful Moderator
Jul 5, 2003
39,025
West Sussex
The Bank of England has announced a 25 basis point cut in interest rates from 0.5% to 0.25%. The first cut since 2009 and the lowest UK rate on record.

£10bn corporate bond buying, another £60bn gilt buying among other measures

Lower for longer.


 


Titanic

Super Moderator
Helpful Moderator
Jul 5, 2003
39,025
West Sussex
FTSE100 and 250 initially up 1% on the announcement... surely the £ will drop a little too?
 




Titanic

Super Moderator
Helpful Moderator
Jul 5, 2003
39,025
West Sussex
Guidance on future move is for rate to be cut again rather than any increase. Perhaps we will see cuts in shorter fixed mortgage rates?

Lower for longer.
 


Blackadder

Brighton Bhuna Boy
Jul 6, 2003
16,077
Haywards Heath
First time in living memory that I have been disappointed at a rate cut.

I welcomed the last one in 2009. Personal circumstances have changed since then.
 












vegster

Sanity Clause
May 5, 2008
27,867
Trouble is, if this fails to stimulate the economy there isn't much else left in the locker.
 


Seasidesage

New member
May 19, 2009
4,467
Brighton, United Kingdom
The government need to pull there bloody finger out and start managing the country again. The drift we currently appear to be in the moment is driving us towards this recession as is the uncertainty over Brexit. Formulate a policy and start to implement it...
 








Half Time Pies

Well-known member
Sep 7, 2003
1,402
Brighton
This reaction to Brexit is so depressing...in fact the Bank of England's monetary policy since 2008 as done nothing but kick the can down the road. QE and lower interest rates will raise asset prices and benefit the wealthy but not filter down to the people who need it most and not stimulate the real economy.

To keep doing the same things and expecting a different outcome is madness, its time for different more radical thinking.
 


vegster

Sanity Clause
May 5, 2008
27,867
This reaction to Brexit is so depressing...in fact the Bank of England's monetary policy since 2008 as done nothing but kick the can down the road. QE and lower interest rates will raise asset prices and benefit the wealthy but not filter down to the people who need it most and not stimulate the real economy.

To keep doing the same things and expecting a different outcome is madness, its time for different more radical thinking.

Tory policy is to make it easy for business to start and prosper and hope that the profits trickle back down to the workers, trouble is that does not happen. We are still locked in to a time of being " Lucky to have a job " and as such pay and conditions are stagnant for many workers, the same workers who have suffered disproportionally since 2006 and have never really recovered from being " All in This Together " .

My company is a High street Franchise and my Franchise directors are pretty good compared to many I know of and worked under but even they are fairly pessimistic looking at the next few years. there has been a keen focus recently on cutting costs back yet again and looking at the profit base to maximise profits.

Head Office have analysed how the changing economy will affect them and they see increasing costs due to the £/$ exchange rate but have advised Franchise directors to keep staff on as the company's business structure is geared to the company being viewed as being good value to the customer and they feel we will draw in more footfall as things tighten up. However, that does not lend itself to pay increases, if any,we who do the work are expected to work harder for the same money as usual. This is the country of The Working Poor.
 




beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,264
Tory policy is to make it easy for business to start and prosper and hope that the profits trickle back down to the workers, trouble is that does not happen. We are still locked in to a time of being " Lucky to have a job " and as such pay and conditions are stagnant for many workers, the same workers who have suffered disproportionally since 2006 and have never really recovered from being " All in This Together " .

Osborne's general policy was to rely on the monetary policy and did little else beside, to have the effect as you describe. and it has to some degree worked, we have markedly lower unemployment than everywhere in Europe (bar Germany), youth unemployment less than half. you may take that as "lucky to have a job" but would you rather jobs or small pay increase with twice the unemployment? and if you recall Balls (remember him) economic policy was the same as Osborne, except a bit less cuts. too early to say what Hammond will do but the future will have to come from fiscal policy as the BoE is out of options now.
 


mothy

Well-known member
Dec 30, 2012
2,094
Isn't our stagnant economy as much to do with the European economies that we trade with failing to gain ground
 


beorhthelm

A. Virgo, Football Genius
Jul 21, 2003
35,264
Isn't our stagnant economy as much to do with the European economies that we trade with failing to gain ground

partially, over played when it suited Osborne to say so as a small proportion of the economy is actually directly involved in external trade, and less than half of that is with EU.
 


Jim in the West

Well-known member
NSC Patreon
Sep 13, 2003
4,530
Way out West
Osborne's general policy was to rely on the monetary policy and did little else beside, to have the effect as you describe. and it has to some degree worked, we have markedly lower unemployment than everywhere in Europe (bar Germany), youth unemployment less than half. you may take that as "lucky to have a job" but would you rather jobs or small pay increase with twice the unemployment? and if you recall Balls (remember him) economic policy was the same as Osborne, except a bit less cuts. too early to say what Hammond will do but the future will have to come from fiscal policy as the BoE is out of options now.

Absolutely - BoE is printing money as fast as it can, and it's not making any difference - apart from making the already rich even richer, and the poor poorer (massive decline in real wages over the past seven years). Unfortunately we shot ourselves in the foot by voting "Leave" - if the vote had gone the other way we'd be looking at 3% pa GDP growth over the next few years, and the chances of rate rises, reversals of QE, and a decent economic outlook. Oh well :)
 




BigGully

Well-known member
Sep 8, 2006
7,139
Trouble is, if this fails to stimulate the economy there isn't much else left in the locker.

I think that is a misrepresentation of the fact, we are not a failing economy our starting position is economically sound, with some future uncertainty which is nothing new, the BoE is just reacting to future projections to try and keep us productive, its not the same as trying to stimulating a failing economy.

The BoE has tried to create an environment where growth, productivity and employment might be encouraged, in their report it didnt project a recession even if they didnt act.

Our starting position remains comparably strong and structurally nothing much has changed, people are still selling stuff, people are still buying stuff and this is likely to continue, it needn't be some negative outlook to the imminent catastrophe of Brexit.
 


vegster

Sanity Clause
May 5, 2008
27,867
Osborne's general policy was to rely on the monetary policy and did little else beside, to have the effect as you describe. and it has to some degree worked, we have markedly lower unemployment than everywhere in Europe (bar Germany), youth unemployment less than half. you may take that as "lucky to have a job" but would you rather jobs or small pay increase with twice the unemployment? and if you recall Balls (remember him) economic policy was the same as Osborne, except a bit less cuts. too early to say what Hammond will do but the future will have to come from fiscal policy as the BoE is out of options now.

Too many jobs are poor paying jobs as companies have cut to the bone, too many have no or little hope. My company has worked out that having to provide for a company pension scheme ( Only because it has been legislated and even then they have delayed implementing it for 3 months thanks to taking advantage of the small print) and having to pay the Living Wage they are angling to create roles of Apprentice in order to offset wage costs. It's an employers market and no matter how hard I work I can't see me getting any benefits in pay and conditions even if I could find another employer for what I do. There is an underworld of drones/Epsilon's.. these are many of the Brexiteers, they voted out as they had nothing to lose as they have lost almost everything already.
 



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