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Does this signal the start of phase two in a 'double dip' recession? Can't help thinking the car industry is going to be in as bad a state, or worse, as was predicted for it before the intervention.
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Wur
On what basis do you come to that conclusion?
Qe can still be extended if necessary
On what basis do you come to that conclusion?
Qe can still be extended if necessary
Because demand for cars would have been artificially stimulated by the scrappage scheme and people would have bought to take advantage before the scheme ended. Those customers are now lost to the industry for the foreseeable future. So, there will now be even fewer buyers.
I think £200 billion of QE is about as much as the governor of the BofE is comfortable with. What noticeable effect would another £50 billion have, anyway?
I think £200 billion of QE is about as much as the governor of the BofE is comfortable with. What noticeable effect would another £50 billion have, anyway?
Wur
Car companies being recapitalised will be able to offer better deals to customes. Remember they were putting £1000 of the £2000 towards the total. They will simply continue offering a similar scheme. many cars that are scrapped are worth well over £1000 anyway!! It has been a sleight of hand!!
The government says it is giving money away but it actually makes money, ast they recieve 17.5% VAT (15% last year). The more expensive teh car the more tax revenues the government makes. Not to mention all teh workers that kept their jobs in dealerships, factories etc!!
QE is an alternative to Interet rate cuts. It is another tool being used to keep inflation close to 2% and get banks lending again. If it does not work, I have absolutely no doubt they will extend teh scheme. What makes you think BOE is adamant that they will not extend teh scheme?? The minutes and documents I have read suggest that everything will be one to get banks lending So far it is simply not happening as it should! We have a prolonged period of low interest rates at best , at worst we could see rates at 0.5% and QE extended by even more..BOE seems resigned and accepting that Inflation will increase above target in the short term, and will fal back in teh medium term.. That is just my opinion!
Car companies being recapitalised will be able to offer better deals to customes. Remember they were putting £1000 of the £2000 towards the total. They will simply continue offering a similar scheme. many cars that are scrapped are worth well over £1000 anyway!! It has been a sleight of hand!!
The government says it is giving money away but it actually makes money, ast they recieve 17.5% VAT (15% last year). The more expensive teh car the more tax revenues the government makes. Not to mention all teh workers that kept their jobs in dealerships, factories etc!!
QE is an alternative to Interet rate cuts. It is another tool being used to keep inflation close to 2% and get banks lending again. If it does not work, I have absolutely no doubt they will extend teh scheme. What makes you think BOE is adamant that they will not extend teh scheme?? The minutes and documents I have read suggest that everything will be one to get banks lending So far it is simply not happening as it should! We have a prolonged period of low interest rates at best , at worst we could see rates at 0.5% and QE extended by even more..BOE seems resigned and accepting that Inflation will increase above target in the short term, and will fal back in teh medium term.. That is just my opinion!
probably get a bigger discount with cash,than using scappage scheme.
chisel 05 Feb 12:38
[...]
many cars that are scrapped are worth well over £1000 anyway!! It has been a sleight of hand!!
The government says it is giving money away but it actually makes money, ast they recieve 17.5% VAT (15% last year). The more expensive teh car the more tax revenues the government makes. Not to mention all teh workers that kept their jobs in dealerships, factories etc!!.
[...]
Wastefulness is a characteristic that seems to be inherent in almost all western societies. The government wants to keep people in jobs. This is a way to create more work for people. But creating work so that people have work to do is not productive if the work does not need doing in the first place. Of course the government doesn't want mass unemployment, as they won't stay in power very long under such circumstances.
Using the same logic, we may as well throw our litter on the streets, so that there will be more jobs for cleaners and road sweepers.
[...]
many cars that are scrapped are worth well over £1000 anyway!! It has been a sleight of hand!!
The government says it is giving money away but it actually makes money, ast they recieve 17.5% VAT (15% last year). The more expensive teh car the more tax revenues the government makes. Not to mention all teh workers that kept their jobs in dealerships, factories etc!!.
[...]
Wastefulness is a characteristic that seems to be inherent in almost all western societies. The government wants to keep people in jobs. This is a way to create more work for people. But creating work so that people have work to do is not productive if the work does not need doing in the first place. Of course the government doesn't want mass unemployment, as they won't stay in power very long under such circumstances.
Using the same logic, we may as well throw our litter on the streets, so that there will be more jobs for cleaners and road sweepers.
Wastefulness is a characteristic that seems to be inherent in almost all western societies. The government wants to keep people in jobs. This is a way to create more work for people. But creating work so that people have work to do is not productive if the work does not need doing in the first place
It does if someone else pays for it!
What do you think global warming is all about? It is the biggest creator of jobs, taxation t hit the world and is about to move onto another level. We are all mugs if we believe that paying upgradiing our cenral heating will actually save us money. You may save 10-20% on your energy bills but it may take 10 years to save the money you just spent on upgrading!! It is laughable!
It does if someone else pays for it!
What do you think global warming is all about? It is the biggest creator of jobs, taxation t hit the world and is about to move onto another level. We are all mugs if we believe that paying upgradiing our cenral heating will actually save us money. You may save 10-20% on your energy bills but it may take 10 years to save the money you just spent on upgrading!! It is laughable!
Do you think climate change is happeniong then? You believe all teh spin without questioning it?
It is being used to create jobs and tax us all.
It is being used to create jobs and tax us all.
Governments take advice from scientists and scientists have been warning governments about climate change for 30 years. In that time, global temperatures have risen by 0.7 degress C. Seems pretty straightforward to me.
Given the facts, I'm actually surprised we haven't seen petrol, gas and electricity taxed more. It's a logical thing to do, but governments seem reluctant to do it. What taxes have been imposed?
Given the facts, I'm actually surprised we haven't seen petrol, gas and electricity taxed more. It's a logical thing to do, but governments seem reluctant to do it. What taxes have been imposed?
LONDON (Reuters) - The Bank of England looks set to leave the door open to further monetary easing and admit the recovery may be weaker than it had hoped when it publishes new quarterly forecasts Wednesday.
In November, the central bank's modal growth projections suggested annual growth of 2.2 percent in 2010, rising to an even punchier 4.1 percent in 2011.
However, these forecasts did not fully account for a fiscal squeeze that now looks inevitable, and 14 of 19 economists polled by Reuters expect the BoE to revise its 2010 GDP forecast lower.
Appears that the fear of a double dip recession outweigh the short term spike in inflation and return to growth. If the BOE downgrades its growth forecasts we will inevitably see low interets rates for longer and maybe even an extension to QE
In November, the central bank's modal growth projections suggested annual growth of 2.2 percent in 2010, rising to an even punchier 4.1 percent in 2011.
However, these forecasts did not fully account for a fiscal squeeze that now looks inevitable, and 14 of 19 economists polled by Reuters expect the BoE to revise its 2010 GDP forecast lower.
Appears that the fear of a double dip recession outweigh the short term spike in inflation and return to growth. If the BOE downgrades its growth forecasts we will inevitably see low interets rates for longer and maybe even an extension to QE
an extension of QE.
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ok. im really beginning to struggle with this, now.
if we owe far too much money and are in a massive debt hole, how much longer can the QE continue for?
at what point does QE stop - when then economy comes round?
what if it doesnt turn round? are we just gonna keep chucking money at it?
can somebody please explain this to me and the potential risks. whats the doomsday scenario, when no amount of money stops the rot?
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ok. im really beginning to struggle with this, now.
if we owe far too much money and are in a massive debt hole, how much longer can the QE continue for?
at what point does QE stop - when then economy comes round?
what if it doesnt turn round? are we just gonna keep chucking money at it?
can somebody please explain this to me and the potential risks. whats the doomsday scenario, when no amount of money stops the rot?
Lets hope that demand for gilts holds up now they need to find buyers. If they struggle I doubt the markets would tolerate any return to QE.
BOE obviously sees that QE needs extending, and are teeing up the reintroduction/expansion. Also means rates will stay low for longer
Funny how BOE policy makers actually agree with me!
On 11:02 GMT, Wednesday 10 February 2010
LONDON (Reuters) - Inflation would stand well below the two percent target in two years' time if interest rates rose as fast as markets predict, Bank of England forecast showed on Wednesday.
In its February Inflation Report, the central bank saw consumer price inflation at around 1.2 percent at the start of 2012, assuming market interest rates started to rise in the third quarter of this year.
The Bank, which froze its 200 billion quantitative easing programme last week, also forecast inflation would be below target even if rates stayed at the current record low of 0.5 percent, effectively leaving the door open for more easing.
As such, the report is likely to boost expectations that interest rates will need to stay low for longer than many analysts currently predict and may not rise before the end of the year at the earliest.
The Bank report showed the economy recovering only very slowly, with output taking until around mid-2011 to return to pre-crisis levels. GDP growth is seen at a rate of around 3.5 percent in two years' time.
"The strength of the recovery is highly uncertain," the Bank said in its report.
Feeding into that uncertainty is the prospect of much tighter fiscal policy. An election is expected on May 6 and most analysts expect greater fiscal consolidation whoever wins that contest.
"The need for a significant fiscal consolidation is clear, but the nature and pace of that correction are uncertain," the BoE said. "And it is unclear how much further households will retrench given the adjustment in their spending and saving already seen."
Funny how BOE policy makers actually agree with me!
On 11:02 GMT, Wednesday 10 February 2010
LONDON (Reuters) - Inflation would stand well below the two percent target in two years' time if interest rates rose as fast as markets predict, Bank of England forecast showed on Wednesday.
In its February Inflation Report, the central bank saw consumer price inflation at around 1.2 percent at the start of 2012, assuming market interest rates started to rise in the third quarter of this year.
The Bank, which froze its 200 billion quantitative easing programme last week, also forecast inflation would be below target even if rates stayed at the current record low of 0.5 percent, effectively leaving the door open for more easing.
As such, the report is likely to boost expectations that interest rates will need to stay low for longer than many analysts currently predict and may not rise before the end of the year at the earliest.
The Bank report showed the economy recovering only very slowly, with output taking until around mid-2011 to return to pre-crisis levels. GDP growth is seen at a rate of around 3.5 percent in two years' time.
"The strength of the recovery is highly uncertain," the Bank said in its report.
Feeding into that uncertainty is the prospect of much tighter fiscal policy. An election is expected on May 6 and most analysts expect greater fiscal consolidation whoever wins that contest.
"The need for a significant fiscal consolidation is clear, but the nature and pace of that correction are uncertain," the BoE said. "And it is unclear how much further households will retrench given the adjustment in their spending and saving already seen."
That's not the BOE agreeing with you. That's speculation on the part of the journalist.
People read too much into what King says. Of course he will say he has left his options open. Thats a 100% predictable answer and means nothing.
The dumbest question this morning was the one about our AAA rating. How else would King answer than the way he did. Just imagine if he said " We are screwed and we will lose it by the end of May"
The dumbest question this morning was the one about our AAA rating. How else would King answer than the way he did. Just imagine if he said " We are screwed and we will lose it by the end of May"
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