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The Consequences of Brexit (part 2)


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Don't get too excited. The standard lever for controlling inflation is increasing interest rates.

 

The Bank of England has a max target of 2% on interest rates. Above that means the economy is sick.

 

Inflation through the 1970's was 15% average, peaking around 24%. That would be fantastic with my fixed rate mortgage. :banana:

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The Bank of England has a max target of 2% on interest rates. Above that means the economy is sick.

 

Inflation through the 1970's was 15% average, peaking around 24%. That would be fantastic with my fixed rate mortgage. :banana:

 

No it doesn't. It has an inflation target of between 1% and 3% ideally 2% achevied by doing what it likes with interest rates

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No it doesn't. It has an inflation target of between 1% and 3% ideally 2% achevied by doing what it likes with interest rates

 

If the target is missed by more than 1 percentage point on either side – i.e. if the annual rate of CPI inflation is more than 3% or less than 1% – the Governor of the Bank must write an open letter to the Chancellor explaining the reasons why inflation has increased or fallen to such an extent and what the Bank proposes to do to ensure inflation comes back to the target.

 

Sounds like a very tight target, they didnt seem that bothered when it was 0%

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If the target is missed by more than 1 percentage point on either side – i.e. if the annual rate of CPI inflation is more than 3% or less than 1% – the Governor of the Bank must write an open letter to the Chancellor explaining the reasons why inflation has increased or fallen to such an extent and what the Bank proposes to do to ensure inflation comes back to the target.

 

Sounds like a very tight target, they didnt seem that bothered when it was 0%

 

Why do you suppose they weren't bothered?

If the oil price crashes because OPEC is playing silly beggars with the shale/sands oil producers and interest rates are already basically zero, the explanation is not a challenge for the governor.

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I spend half my time trying to convince the remainders that predictions are not facts and seeking acknowledgement of the things we don't know.

 

There's been talk of rising inflation recently. But UK inflation is around 1.6% and German inflation is around 1.9%. So i would ask the remainders what happened to the scary inflation which was predicted?

 

You spend more time portraying your own predictions as fact, and most of your predictions are based on a deeply flawed view of the world that you also present as fact.

 

You need to take a look at what you are posting.

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You spend more time portraying your own predictions as fact, and most of your predictions are based on a deeply flawed view of the world that you also present as fact.

 

You need to take a look at what you are posting.

 

Can you back that up?

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