| |
Major Site Upgrade in Progress |
 |
|
 |
|
Shahla
Money Managing Guru
Joined: 13 Nov 2004
Posts: 3324
Cash Points ££ 126163.28
|
|
|
 |
|
 |
|
 Posted: Sun Apr 22, 2007 6:42 pm Post subject: UK Interest Rates to Rise to 5.50% on May 10th , What's Next |
 |
|
|
 |
|
 |
|
|
|
|
UK Interest Rates to Rise to 5.50% on May 10th , What's Next ?
The money markets have now priced in a rise in interest rates to 5.50% at the May meeting of the Bank of England's Monetary Policy Committee.
In my previous article I discussed the reasons why interest rates have been on the rise during 2007 towards the target of 5.75% (British Pound Finally Awakens to Inflation feeding Rising UK Interest Rates 18th April 07)
The question now to ponder is what happens after interest rates hit 5.50%. The answer to this will become apparent with the release of next inflation figures in May and June 07, as any signs of inflation accelerating away, would signal to the money markets that inflation is now out of control, and it would mean at some point the Bank of England will need to deploy panic measures of raising interest rates by more than 0.25%. Since the baby steps have had little effect and therefore larger increases may be enacted.
However at the moment, the Governor of the Bank of England is continuing to adopt a nothing is wrong attitude, despite the fact that the Bank has FAILED to keep inflation as measured by the CPI from breaching the upper boundary of 3%. The Bank of England is still firm in its forecast for inflation to move back to 2% by the end of this year.
In this regard, the May and June inflation statistics are important, any further sharp rise in inflation as we witnessed this week, could be followed by a 0.5% rise in UK Interest rates at the following MPC meeting, as the Bank attempts to bring inflation back under control. Any further rise in the CPI index, say to 3.2% (from 3.1%) would likely result in a 0.25% rise at the following MPC Meeting.
The Bank is hoping that falling gas and electricity bills will cut inflation in the coming months to back below 3%. However with earnings growth appears on target to hit 5% this year, and the growing demand for raw materials from emerging markets such as India and China means weakness in energy prices may be temporary. Thus it looks increasingly likely that Mervyn King will be writing many more letters to the 'New' Chancellor later this year.
By Nadeem Walayat
(c) MarketOracle.co.uk 2007
The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk
This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk |
|
|
|
|
|
|
 |
Online Finance Tools & Calculators |
 |
| Credit Score Calculator |
Easy to use online Credit Scoring tool - Calculate your credit score now online for FREE ! using the Moneyforums.co.uk credit scoring tool. Also TEN Tips on improving and mainting a good credit rating ! |
|
| Quick Health Calculator |
Easy to use quick health calculator to help you get started on the path to fitness. Calculates your body mass index (BMI). |
|
| "When will I die ?" Calculator |
Calculate when will you die based on your current life style and then more importantly what you can do about extending your lifespan ! |
|
| Mortgage Calculator |
Easy to use online Mortgage calculator tool - Calculate how long it will take to pay off your mortgage and what your monthly repayments will be as well as interest charged per month per each year. |
|
| Savings Calculator |
Use the flexible savings calculator to estimate the amount of interest you would earn given a level of monthly savings, with many optional settings. |
|
| UK Tax Calculator |
Check your tax and NI liability using this easy to use online tool. Outputs, Tax, Ni, Net pay and gross pay on an annual, monthly and weekly basis, also estimates your tax burden and the number of days a year you work for the tax man ! Plus lots of tax saving tips. |
|
|
 |
|
 |
|
Money
Forums Guides |
|
| Credit
Card Stoozing |
The
following guide explains the basics of credit
card stoozing in a step by step basis. |
|
| Discount
Vouchers |
Online
discount vouchers giving upto
50% off in stores such as Dixons,
Tesco, Avon, Currys, Boden and more. Many
of the vouchers are time limited - So check
back regularly |
|
| Money
Saving Guide |
Guide
to saving money on household bills & personal
finances - Start saving thousands of £'s
every year TODAY ! |
|
| Savings
Tree |
A
guide to Savings Accounts, from Cash ISA's to
Regular Savers to Premium Bonds, all explained
in an easy to understand manner. |
|
|
Users
Groups | Profile
| Messages
| FAQ | Sponsers
& Links | Member
list | Recommend this site | Top Money Saving Sitee
© 2004 - 2007 Moneyforums.co.uk / Market Oracle Ltd - Asserts copyright on all topics & posts made on this site. Moneyforums are open forums, and thus posts are NOT endorsed by Moneyforums.co.uk / Market Oracle Ltd . Any and all information provided within the Website is for general information purposes only and nor is or shall be deemed to constitute, financial or other advice. We recommend that independent professional advice is obtained before you purchase any product and/or service. All tools and guides are provided as is for general information purposes only.
|
|
|
