Should the BoE raise interest rates?

[BrilloPad]

Yes according this economist.

The Bank of England should raise interest rates next week – Telegraph Blogs

Personally I think interest rates should have been raised in 2009 once Lehmans drama was over and inflation started to rise. Or at least they should never have started QE.

But to raise IR now would be total madness - defation and depression would follow. Or am I wrong?

[Gonzo]

Personally I think interest rates should have been raised in 2009 once Lehmans drama was over and inflation started to rise. Or at least they should never have started QE.

But to raise IR now would be total madness - defation and depression would follow. Or am I wrong?

From what I have read the banks are not lending instead they are patching up their capital position so the low interest rates are not stimulating lending (the demand is there but the supply isn't).

I think that there is a risk that when the banks do start to lend again the brakes will need applying sharply. If the bank doesn't move quickly enough the economy will get out of hand again. I suspect the economist is essentially saying that but I'll read it and check.

EDIT: OK, I've read it now and he is not saying that at all. I still think that I am right though.

[MarillionFan]

They should stay at .5%. I'm making an 8k a year profit on my mortgage at this rate. Long may it continue.

[BrilloPad]

They should stay at .5%. I'm making an 8k a year profit on my mortgage at this rate. Long may it continue.

So its not just admin you now control - but Mervyn King too? Your rise up the greasy pole is too quick - are we going to start having to be nice to you?

[Zoiderman]

I think they should lower them some more, to stimulate the economy....

(I may or may not have a deeply entrenched vested interest).

To be honest, if they started putting up interest rates, the housing market, which, like it or not, is very important to the economy, would stall further. As the stamp duy holiday has ended, curtailing a lot of activity on the bottom end of the market, and a new mansion tax has started on the upper end of the market, effectively curtailing activity on the upper end, I don't think they'll now squeeze the middle. It would likely add £1000-2000 to the average mortgage if they do, and I really don't think Cameron is likely to want this, and whilst I understand the BoE is independent in action, in reality it isn't. What they will do, imo, is stamp on any new housing bubble, quickly, whilst not allowing the market to fall much at all, if not in real terms.

That's my take anyway.

[Scrag Meister]

Anyone on a tracker is going to say NO!!!!!

I am one of them.

[BrilloPad]

I think they should lower them some more, to stimulate the economy....

I disagree. the issue is that bank are not lending. further stimulus will not work - well I suppose it would inflate away the debt.

a new mansion tax has started on the upper end of the market, effectively curtailing activity on the upper end

IMO the USD is the 2nd reserve ccy of the world. The first is London property.

I understand the BoE is independent in action, in reality it isn't. What they will do, imo, is stamp on any new housing bubble, quickly, whilst not allowing the market to fall much at all, if not in real terms.

I agree strongly with that. Though it will be interesting to see how they stamp on it.

[MarillionFan]

Anyone on a tracker is going to say NO!!!!!

I am one of them.

WHS. But I can take a rise to 3% before having to pay any interest.

[Zoiderman]

I disagree. the issue is that bank are not lending. further stimulus will not work - well I suppose it would inflate away the debt.

I was being facetious BP (I have 3 mortgages)

[TimberWolf]

IMO the USD is the 2nd reserve ccy of the world. The first is London property.

LOL. Let's see.