On the “duh” side of non-revelations, Bank of England says Rates Could Rise or Fall.
That actually made headline news on the BBC. There was one curious detail.
The next move in UK interest rates could be up or down, Bank of England governor Mark Carney has again warned.
At present, UK households appeared to be “entirely looking through Brexit-related uncertainties”, he said in a speech at the London School of Economics.
However, the country was “entering a period of somewhat higher consumer price inflation”, he added.
As a result, monetary policy could respond “in either direction”.
Got that?
The UK is going to have “somewhat higher inflation” and as a result monetary policy can go “in either direction”.
Say what?
Mish Translation
Carney’s statement is best translated as “we will do what the F we want without reason.”
That should not be a revelation either, but had Carney stated things that precisely, the world would have been shocked.
Mike “Mish” Shedlock
It actually smacks of defiance.They don’t want to raise interest rates,and are trying to sound out the market for the consequences if they don’t.
LikeLike
Definitely a slow news day. No doubt a top story on the non-German Crapbook news feed. Indicates Totalitarian Central Banking Monopoly needs competition. I propose that the John Law School of economics hire someone like Stephen Hawking to provide eight dimensional interest rates moving in 64 directions outside of space-time as we know it. That would generate some good fake news instead of this insipid non-news.
LikeLike
BBC is next to useless nowadays.
UK spending has been crazy recently. Never seen it so busy or so many new cars on the road. Low rates fuelling it through early Brexit but a bill to be paid.
What Carney means is lower £ might pressure rates higher but he’s concerned with the impact given incerasing personal debt levels that were falling quite well. UK will see an inflationary does over the lower £.
Between the devil and the deep blue sea. Rates should not have been cut in summer 2016. They over egged the pudding expecting an immediate Brexit slow down that didn’t happen.
They are data and sentiment driven and depending on what is the greater evil – inflation or consumer bust – could jump either way. They backed themselves into this through relying o forecasts that have been shown to be wrong.
The real test is the next 5 years.
UK can supposedly now live with lower NAIRU.
We will find out.
LikeLike
The Pound has lost nearly a third of its value with respect to the USD. The BOE may have to step in to avoid a currency crisis.
LikeLike
Unless the Euro tanks too.
There is a chance the GBP could be a safe haven at any time compared to alternatives close by.
Talk is of a need to keep the pound down once levels of Brexit uncertainty subside.
Also, the USD has strengthened at the same time, increasing the divergence.
GBP strengthened post May speech today.
LikeLike
My forecast: Periods of sun alternating with cloudy periods and the possibility of scattered showers, with moderate wind from variable directions.
LikeLike
Just another member of the Global Central Banking Cabal, pissing away the last remaining shreds of his credibility.
Shiny stuff doing quite well today. A mere co-incidence?
LikeLike
Pounds is tanking and most likely more to come.
Thanks for that stupid Brexit idea – soon even Mish will realize that there is not much produced within GREAT Britain to keep them great – it will be another time of ‘kleine broetchen backen’ or ‘eat humble pie’. At least we in the US will enjoy cheap vacations in London – not much shopping to be done but local British food is always great – right? LOL
LikeLike