Rate hike in UK as early as next month?
23 January 2004, 09:54 AM
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Certainly looking more likely after this morning's retail sales figures, which were much stronger than expected.
What it does show is that a huge proportion of Christmas period spending was done over the internet, something that had been greatly under-estimated.
The Bank of England might feel they have to make a move to curb the potential inflationary pressures on February 5th with a 0.25 hike from 3.75 to 4.00.
What it does show is that a huge proportion of Christmas period spending was done over the internet, something that had been greatly under-estimated.
The Bank of England might feel they have to make a move to curb the potential inflationary pressures on February 5th with a 0.25 hike from 3.75 to 4.00.
23 January 2004, 10:08 AM
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people don't take 'too much' notice of a .25% hike, a .5% hike will make people stop and think about their spending more than two 2.5% rises. I think to curb stupid spending, a 'shock and awe' 
rise may need to occur.
Probably wrong though, who knows. Almost as tricky to predict as property prices.
rise may need to occur.Probably wrong though, who knows. Almost as tricky to predict as property prices.
It's not the topic, it's not me....
23 January 2004, 10:42 AM
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Not quite that clear-cut towzer. The balance between our visible and invisible trade balance with the US is a fine one. Although the MPC would take that into consideration, it wouldn't usually be the primary determinant.
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23 January 2004, 12:23 PM
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Personally, i reckon $/£ will still go higher if they do hike, on the basis of further hikes later on in the year.
If they do nothing, i can't see Cable doing much, as expectation would just be pushed back to March.
So unless there's a wholesale reversal in the dollar's fortunes between now and then, i see limited downside to sterling.
If they do nothing, i can't see Cable doing much, as expectation would just be pushed back to March.
So unless there's a wholesale reversal in the dollar's fortunes between now and then, i see limited downside to sterling.
23 January 2004, 01:16 PM
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My weekly Barclays briefing assumes a 0.25% rise in February, with at least 2 more 0.25% rises this year.
Gonna be some pain for those who can't stop spending at a greater rate than its coming in.....
Hugh
Gonna be some pain for those who can't stop spending at a greater rate than its coming in.....
Hugh
23 January 2004, 01:34 PM
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If rates do go up much more, there is no way Gordon Brown will make 3% growth this. His tax revenue forecasts now look evry shaky and anything less than 3% will give him a huge hole in the government's spending programme.
Current rates must be crippling anyone selling to the US. BoE will be very mindful of Forex effects of a rise, so fingers crossed.
Current rates must be crippling anyone selling to the US. BoE will be very mindful of Forex effects of a rise, so fingers crossed.
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