Nosmo-King
Well-known member
Not an economist but I can’t see how you can control inflation when the 2 motivators contributing to inflationary pressures are outside the BOE control. Can anyone advise?
You really believe this? Food shopping, a staple requirement has shot up in recent times.Some estimates claim around 15%. I can’t see spending being a major issue - a lot of folk can barely get by as it is! Playing a bit of devil’s advocate here but you get my pointA higher interest rate makes money "more expensive" so reduces spending and encourages saving, this helps dampen down inflation.
This approach only works if people are spending in excess on items above and beyond what they need and have spare money to save.A higher interest rate makes money "more expensive" so reduces spending and encourages saving, this helps dampen down inflation.
I do get your point. The intention of the BOE increasing interest rates is to attempt to "control" inflation though. I'm not saying it'll have much effect.You really believe this? Food shopping, a staple requirement has shot up in recent times.Some estimates claim around 15%. I can’t see spending being a major issue - a lot of folk can barely get by as it is! Playing a bit of devil’s advocate here but you get my point
You really believe this? Food shopping, a staple requirement has shot up in recent times.Some estimates claim around 15%. I can’t see spending being a major issue - a lot of folk can barely get by as it is! Playing a bit of devil’s advocate here but you get my point
America are increasing the base rate quicker than usWhich is fair enough - although the pound v the dollar the pound has dropped significantly against the dollar - so interest rates haven’t helped to date
When is your comparison from? Interest rates are rising in US as well. Our major drop in the pound is because we are no longer a currency of safe haven after financial crash and rise in importance of the Euro.Which is fair enough - although the pound v the dollar the pound has dropped significantly against the dollar - so interest rates haven’t helped to date
Pound sank to its lowest level earlier in the week since March 2020.Against the dollar.When is your comparison from? Interest rates are rising in US as well. Our major drop in the pound is because we are no longer a currency of safe haven after financial crash and rise in importance of the Euro.
A weak pound helps exports, of course.Increase in rates is to try and strengthen the pound, to help import/export prices. You also have to respond to leading economy’s raising their rates like America
It won’t stop inflation increasing in this instance but it might prevent from being even higher.
Because they are the currency of last resort in times of trouble and they raised their interest rate before us this weekPound sank to its lowest level earlier in the week since March 2020.Against the dollar.
Yep , if only we hadn't screwed up our biggest export market .A weak pound helps exports, of course.