Thursday, August 04, 2005

Wotcher, cheap money!

Something we (that's the royal "we", FYI) here at the Globblog have been expecting for some time has now come to fruition.
The Bank of England's Monetary Policy Committee today voted to reduce the Bank's repo rate by 0.25 percentage points to 4.5%.

In the first half of the year, output growth in the United Kingdom was subdued. Household spending and business investment growth have slowed. Although there are some signs of a pickup in consumer spending, downside risks remain in the near term.
Among eleven leading central banks (per Reuters), the Bank of England now joins Sweden's Riksbank as rate cutters among the top 11, while the Bank of Japan, European Central Bank, Bank of Canada, Swiss National Bank and the Danish National Bank are all in long-term holding patterns. Only the Fed, the Reserve Bank of Australia, the Reserve Bank of New Zealand and Norges Bank (Norway) have upped rates this year. Among those rate raisers, and the Australians declined on further increases yesterday and the Kiwis anticipate their own holding pattern for the rest of this year.

So while the Fed is determined to keep upping the ante (as soon as next week, in fact), much of the rest of the world is just as determined to sit out the hand.

456 Comments:

At 7:13 AM, Anonymous DF said...

ANd what will the chinese do ?
THey might raise rates in line with the USA to curb excesses in investment.

OR that's a big OR,
the party is over. UK s seen it because housing prices are falling tthere.
CHina is about to see it, because shangai prices already lost 20 % in 2 months ...
THe USA might see it in the coming 2 months...
In which cases, once housing prices fall, rates will fall too...
However it will be nominal rates falling, and deflation pushing real interest up ... Thanks to bankruptcies ...

It all depends on how long housing prices continue to rise. My bet is we still may see some interest rate rises until they go down. By december all should be done.

 
At 8:00 AM, Anonymous DF said...

look at that, employment figures finally reaching a decent number, last two months h revised up, for the first time a decent raise in hourly wages (though oil prices may erase some of its effect)... And the markets move down.
If employment and wages look good, then the fed will raise rates, so goes the thinking.
Well if it does, then housing prices will go down, and the party will be over.

 
At 10:05 AM, Anonymous cm said...

I was surprised by the (at least superficially) favorable jobs report.

One thing that struck me was in table A-6, NSA total employment Jul'04-Jul'05 lists about +2.6 million (140,700 vs. 143,283), and 1.4 million, more than one-half, of that growth is people over 55. What's that mean?

The pattern is thus (in millions):

16-17 +0.09
18-19 +0.05
20-24 +0.16
25-34 +0.14
35-44 +0.08
45-54 +0.66
55-?? +1.40 (!)

total +2.58

Any idea?

 
At 11:10 AM, Blogger Elaine Supkis said...

Walmart hired more greeters.

 
At 11:47 AM, Anonymous DF said...

older workers may already have a pension plan, so they're cheaper.
Or older workers are more indebted, so they're ready to work cheaper.
Or ... i dunno, here in France after 50 years it's close to impossible to find work. Let alone 55.

 
At 10:45 PM, Anonymous cm said...

Elaine: Imbuing some seriousness into your statement, I was under the (admittedly vague) impression of having seen retirement age people (way over 55, no offense please) in job positions with customer contact, e.g. healthcare or certain public services. When I say "impression" I mean it made an impression on me, nothing else.

 
At 10:49 PM, Anonymous cm said...

df: Yes, age discrimination is running rampant in Western (EU) Europe. A few years ago it was not uncommon in Germany to see job ads that woul state explicitly an age limit of 35 for engineer positions, or 29 for sales positions. I'm not making this up, I have seen it with my own eyes on public bulletin boards, the internet, and the job pages in newspapers.

Apparently US discrimination laws are stronger, but I'm being told it works out the same way. Hence my surprise.

 
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At 10:32 PM, Anonymous Anonymous said...

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At 12:00 AM, Anonymous Anonymous said...

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At 6:54 AM, Anonymous Anonymous said...

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