I think it's time for a small interest rate rise

[Zak33]

I think that we should have had a small interest rate rise by now

The chap on the monetary board who keeps voting for one has a point I think

Senior Bank exec calls for rate rise http://www.bbc.co.uk/news/business-29782257

Let's face it..... There will never ever be a good time for mostpeople who are borrowers to pay a bit more..... But there is also never a ever EVER a good time for a rapid increase.... It needs to be gradual

If the bank of England rose interest rates by 1/ 4 of one percent now and then the same in maybe March we'd have a chance to adapt to it in our lives

[kalniel]

Interest rate rise now would add to deflationary pressure, and we really don't want to get stuck in that.

There's no reason why an eventual rise in the future couldn't be gradual either.

[TheAnimus]

We are not nearly as out of the woods as is sometimes portrayed, the eurozone is very much balanced on a knife edge, Germany slipping into recession, France attempting to get to recession as fast as possible, Italy thinking that leaving the euro could be brilliant, Greece, well still is Greece, Spain is looking at a fracture, and through it all, the EU wants more money from us.

Housing market is likely to have a winter contraction, many people have found in real terms their income has contracted, whilst unemployment has fallen nicely, I think that it would be difficult to do this today.

If things continue as they are trending, then yes, having a small rise would make sense. But given how many little things are in such a precarious manner, I can't help but agree with the consensus.

[Saracen]

kalniel is right, IMHO.

Interest rates are never simple, and right now, we have a very weird economy. But remember this, increasing interest rates will have some effects we need, and some we don't. It's about trying to predict the relative effects, benefits from and damage caused by, several different effects.

An one of the ironies is that inflation is weird, too. Too much = bad. But stranger, for the economy, too little = bad too. For why, look up "deflationary cycle", or "stagnation".

Personally, I'd love to see rates rise. Why? Simple, no debt, no mortgage but a (very modest) level of savings income that's been dire for years. But for the country, I agree with kalniel.

[RobbieRoy]

I think there are still too many deflationary forces about, in addition to economic slow down in Germany. The housing market has already slowed and there are significant numbers of mortgage holders who would seriously suffer if rates rose.

Just look at the price of oil -down to around $85 a barrel from $110 not too long ago despite worries about supply arising from situations in Ukraine, Syria, Iraq the price has fallen to lows due to lowered global demand, indicative of economic slow down.

Whilst this will in due course lower consumer prices it will also reduce income for oil exporting countries, such as Russia (already in recession) and also change the economics for investment in fracking (US costs of fracked oil are between $70 and $95 a barrell).

[Saracen]

Oh, and one more thing.

A very small rise will have very small actual economic impact. The bigger impact is that it would signal the start of a direction of travel, and I don't think now is yet the time to send that signal.

[aidanjt]

Interest rate rise now would add to deflationary pressure, and we really don't want to get stuck in that.

Given that stagflation is one of the West's biggest problems right now, a bit of deflation pressure arresting inflation wouldn't be a bad thing.

[Gerinako]

The low interest rates continue to support a zombie economy.

We need to see a gradual rate rise

[TheAnimus]

Given that stagflation is one of the West's biggest problems right now, a bit of deflation pressure arresting inflation wouldn't be a bad thing.

Do you think the fall in oil is not enough?

I think when we look at most UK consumer habbits, the bulk of their spending that has been subject to high inflation, is rent and food. The latter will be reduced swiftly by lower oil price.

Sadly house inflation is used as a positive, so that won't be changing any time soon.

It's such a delicate balance to try and walk, it would be brilliant to have some stimulus now, but sadly we had 13 years of New Labour.

[Saracen]

...

It's such a delicate balance to try and walk, it would be brilliant to have some stimulus now, but sadly we had 13 years of New Labour.

And sadly, may soon get another 5 years of Labour inflicted on us, despite Ed M's best efforts to mess it up.

That, IMHO, is one reason for low turnout. It's depressing having to vote for the least bad option, from a vjoice of dumb or dumber. I'll leave it to individual preference to assign which is which.

It's also one of UKIPs best selling points. Whatever they are, they aren't the other two. It all depends if people can stomach what they think they are.

[kalniel]

It's also one of UKIPs best selling points. Whatever they are, they aren't the other two. It all depends if people can stomach what they think they are.

Hasn't worked too well for the Greens.

[lukart]

Never a easy issue. The rates remain low untill the economy picks up, the problem is that banks are not lending as much as they could and as such the economy is not growing. Even if the rates remain low, if there's not much credit flowing into the system, it wouldnt translate into inflacion..

[TheAnimus]

Hasn't worked too well for the Greens.

Next to the Greens, UKIP look sane. I say that lightly, as someone who has mostly dated 'immigrants' doesn't have a good pension, isn't going to drop dead in the next 20 years statistically speaking. I mean someone who really isn't a UKIP voting demographic.

[wasabi]

Never a easy issue. The rates remain low untill the economy picks up, the problem is that banks are not lending as much as they could and as such the economy is not growing. Even if the rates remain low, if there's not much credit flowing into the system, it wouldnt translate into inflacion..

I'm a bit worried about banks lending too. Everyone hopefully assumes it will be to businesses, while I suspect reality will be to overstretched consumers and on another property boom. Everyone breathes a sigh of relief, feeling happy until the bubble bursts again.

[SeriousSam]

TheAnimus - Whilst I agree that the "inflation" rises in food costs will lessen, it will be very much a mixed basket... if you'll excuse the pun.

1. Cereal production and stock holding may be up but many countries are stockpiling, which is lessening trade despite the price drop. Rice is the odd one of the bunch as production went down, but has been at record levels so price is reasonably stable. My guess is that many food companies who have absorbed the increases will look to benefit from the decreases, with any price drop coming from Supermarket pressure.

2. Projected decline in Russian consumption of EU Foods, especially luxury items, may have an impact but some items notably chocolate face much bigger on cost pressures (availability - climate / Ebola). In addition, luxury items are bought by people with money so there will be less incentive to cut prices. So they will probably remain reasonably static in the main, with some increasing or "size shrinking" further.

3. Fruit & Vegetables will benefit most from a reduction in oil price as it comprises a larger proportion of the production cost. However, price per Kg is also significantly affected by Food manufacturing usage. Which in turn is highly influenced by eating habits, so a lot depends on that. Still, buying unpackaged fresh fruit and veg is likely to become an even better option for the price minded.

4. Meat is a difficult one to assess as in some cases, e.g. fish and chicken, availability is a massive cost driver. In addition, changes to the legislation regarding what can go into meat products has had a massive effect on cost. A lot will also depend on levels on consumption and of what type, not just here but in places like China. It also takes a long time in most cases to adjust production to demand, so I wouldn't expect much reduction in inflationary pressure in the short term.

5. Milk and milk products are likely to go in opposite directions. Milk price is unlikely to go up any further, but whether the price will be renegotiated down is a big unknown. Milk product such as cheese are still likely to go up in price due to demand from the far east, while output remains relatively static.

[Top_gun]

Next to the Greens, UKIP look sane. I say that lightly, as someone who has mostly dated 'immigrants' doesn't have a good pension, isn't going to drop dead in the next 20 years statistically speaking. I mean someone who really isn't a UKIP voting demographic.

I don't think the Tories will ever get over their 'Swivel-eyed loons' slur. Pretty pointless to slur other parties such as the Greens or UKIP. I know a few members from the Green Party and to me they come across as very intelligent types.

As for interest rates, we have a Neoliberalism economy which is very dependent on the housing boom. Burst that bubble with interest rates rise and we're looking at another recession. Blaming Labour or Tory for the state of the economy is pretty pointless when the real issue is neoliberalism.