Don't Expect a Return to Ultra-Low UK Interest Rates
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- เผยแพร่เมื่อ 19 มิ.ย. 2024
- Inflation has hit the Bank of England's 2% target, but is unlikely to fall much further. That's good news - it means we may have finally escaped the deflationary backdrop of the 2010s. But it also means we can only expect a handful of rate cuts. Bloomberg's John Stepek discusses on "The Pulse with Francine Lacqua."
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They need to get it down to 4 as a new baseline.
Why 4%?
Base rates need to be higher so we have negative inflation as inflation is compounded measure. Only zombie businesses should for QE and ZIRP that should have been allowed to go to the wall
Can someone translate
Doesnt the interest rate carry out a number of useful uses one of which is to maintain and improve productivity? If interest rates are at zero any fool can start, or run a business, on a less than efficient manner by borrowing next to free money and not have to make a decent return on it to stay in business.
exactly, hence why the UK is a massive mess. All those zombie businesses rleied on cheap foreign labour and the politicians can then say look we are growing. Those businesses never needed to invest in machinary and skills.
Uk inflation hit 10% during covid
Now close to 2%
Still govt. Increase interest rate
This will result in more investment in market
Thus more inflation in future
After 1 year
So new govt. Will have probpem to tackle it
If they reduce interest rate people salary will be reduced by companies
If Increased than more inflation
Its hard to balance it for any govt.
lowering interest rates allow banks to borrow from the BOE that then allows them to lend it out fueling a credit bubble due to fractional reserve banking
Money printing
Explain the difference between growth and inflation.... IMO they're the same. Growth is just the buzz word used to make the common man think inflation is good for him.
Growth and inflation are completely different.
@@grimezi So please explain the difference between the economy growing and the economy inflating?
Normally when growth is measured, it is measured in GDP which is the the total amount spent on final goods and services (less imports). So politicians wrongly think that seeing this figure go up is growth and therefore good.
Inflation is a the expansion of the money supply, although many people confuse it to increase in prices (currency devaluation) with is a symptom of said expansion.
UK GDP is not good quality growth as it is based on currency devaluation and immigration - this is GDP per capita. Basically the more people in the country, the more they spend, so you have a velocity of capital. It is a kin to telling workers to dig a hole and then filling it up again. This is why the UK is in a complete mess.
You devalue the currency, the costs of goods go up, so GDP would go up.
You have more immigation, you have more consumers so again GDP goes up.
Why is this bad: Currency devaluation means your money buys less, making investment more difficult.
More immigration puts a strain on public services and infrastructure, which becomes ever more expensive to source due to currency devaluation
Watch it zoom when racheal Reed gets going
Fools again he holds interest rates 🤬🤬🤬🤬🤬🤬