Bank of England and other news
Posted: 09 Feb 2018, 00:03Makes very interesting reading today.
The BOE have said that the economy is strong. That it will outperform last years predictions over the next two years. That last years interest rate rise didn't do the job and, finally, that Brexit is the biggest boogeyman and it all hinges on a smooth Brexit.
Then they go on to say they will raise rates quicker and more sharply than they have done so far.
All very BOEish and all that financial stuff. Until you stop and read what they actually said. They said.
The economy is so strong that we can't control it with a few words and a single interest rate rise
The economy is so strong that it will continue to grow even with us raising interest rates
The Government is doing a GOOD job on Brexit and will deliver a smooth exit.
That last one is a interesting one. They didn't say "we're watching how the government does and will adjust rates to match". They said "Brexit is the wildcard and needs to be handled well or we will have to intervene to rescue the economy. Oh and by the way we're not intervening to rescue the economy, we're intervening to stop it going too fast".
The markets had expected a rate rise in May. They had expected some firm words leading up to it. What they got was fighting talk. In fact the FT has already stated that these words were used in September, prior to the November rate rise. Which would lead us to the conclusion that the BOE is going to raise rates again either in March or April. The language in September was nowhere near as positive or hawkish as today.
After spending an hour reading and digesting that from 3 different viewpoints. I then opened an Independent article lamenting the fact that the Tories have a 3 point lead over Labour in the polls and that May's personal rating has risen two points to 37, whilst Corbyn remains on 29....
Put all of that together and the "news" of the last three weeks feels more like Trumps "Fake News" than reality.
All in all an interesting day. Especially as the Dow Jones fell 1,000 points for the second time in a week...
The BOE have said that the economy is strong. That it will outperform last years predictions over the next two years. That last years interest rate rise didn't do the job and, finally, that Brexit is the biggest boogeyman and it all hinges on a smooth Brexit.
Then they go on to say they will raise rates quicker and more sharply than they have done so far.
All very BOEish and all that financial stuff. Until you stop and read what they actually said. They said.
The economy is so strong that we can't control it with a few words and a single interest rate rise
The economy is so strong that it will continue to grow even with us raising interest rates
The Government is doing a GOOD job on Brexit and will deliver a smooth exit.
That last one is a interesting one. They didn't say "we're watching how the government does and will adjust rates to match". They said "Brexit is the wildcard and needs to be handled well or we will have to intervene to rescue the economy. Oh and by the way we're not intervening to rescue the economy, we're intervening to stop it going too fast".
The markets had expected a rate rise in May. They had expected some firm words leading up to it. What they got was fighting talk. In fact the FT has already stated that these words were used in September, prior to the November rate rise. Which would lead us to the conclusion that the BOE is going to raise rates again either in March or April. The language in September was nowhere near as positive or hawkish as today.
After spending an hour reading and digesting that from 3 different viewpoints. I then opened an Independent article lamenting the fact that the Tories have a 3 point lead over Labour in the polls and that May's personal rating has risen two points to 37, whilst Corbyn remains on 29....
Put all of that together and the "news" of the last three weeks feels more like Trumps "Fake News" than reality.
All in all an interesting day. Especially as the Dow Jones fell 1,000 points for the second time in a week...