Growth at 2.5% by 2015- Bank of England

SoupbowlSoupbowl Posts: 2,172
Forum Member
✭✭✭
Lets face it, its in the bag for the Conservatives. Tidy. : )
«1

Comments

  • jcafcwjcafcw Posts: 11,282
    Forum Member
    ✭✭
    They do say that it is a unsustainable recovery though.
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    jcafcw wrote: »
    They do say that it is a unsustainable recovery though.

    No different from any period of growth in all of history in that sense then i guess.
  • MARTYM8MARTYM8 Posts: 44,710
    Forum Member
    And their previous forecasts have been so accurate!:rolleyes:

    Just make any old numbers up seems to be their view,

    As for the Tories having anything in the bag I suggest the OP checks our electoral system. It nigh on impossible for the Tories to win an overall majority and that's before you factor in the effect of UKIP.
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    MARTYM8 wrote: »
    And their previous forecasts have been so accurate!:rolleyes:

    Just make any old numbers up seems to be their view,

    As for the Tories having anything in the bag I suggest the OP checks our electoral system. It nigh on impossible for the Tories to win an overall majority and that's before you factor in the effect of UKIP.

    I suspect you are getting your OBR and BoE mixed up. UKIP threat will be nullified. By 2015 Conservative support will hold strong, and the nugget of a referendum will be just around the corner by then. UKIP will be easily dealt with, most likely taking more votes from disgruntled perma-reds in the north who are faced with voting for red-balls and even they cant bring themselves to do it.

    Yep, things are looking rosy in the rose garden.
  • PrestonAlPrestonAl Posts: 10,342
    Forum Member
    ✭✭
    Soupbowl wrote: »
    I suspect you are getting your OBR and BoE mixed up. UKIP threat will be nullified. By 2015 Conservative support will hold strong, and the nugget of a referendum will be just around the corner by then. UKIP will be easily dealt with, most likely taking more votes from disgruntled perma-reds in the north who are faced with voting for red-balls and even they cant bring themselves to do it.

    Yep, things are looking rosy in the rose garden.

    What's a nugget of a referendum?
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    PrestonAl wrote: »
    What's a nugget of a referendum?

    Metaphor. Nugget of gold. The lily livered UKIPe'rs (who do need to be courted to get the win sorted in 2015) will be bought by that. Not that i think they will get the result they want, but no need to worry about that.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    And the reason the BoE think that might be the case?

    Mark Carney may have to relaunch QE to keep down interest rates

    The Bank of England is expected to take further action to ensure interest rates remain low after last week’s pledge failed to sway the market.

    http://www.telegraph.co.uk/finance/bank-of-england/10241750/Mark-Carney-may-have-to-relaunch-QE-to-keep-down-interest-rates.html

    The only way to get growth is through new money. That comes from either exports or borrowing; government and/or private. Which do you think we have had to revert to in order to generate a feel good factor in the (long) run up to the election?
  • trunkstertrunkster Posts: 14,468
    Forum Member
    ✭✭
    jcafcw wrote: »
    They do say that it is a unsustainable recovery though.

    Yep, if only we could abolish boom and bustism like like labour did.:rolleyes:
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    WindWalker wrote: »
    And the reason the BoE think that might be the case?

    Mark Carney may have to relaunch QE to keep down interest rates

    The Bank of England is expected to take further action to ensure interest rates remain low after last week’s pledge failed to sway the market.

    http://www.telegraph.co.uk/finance/bank-of-england/10241750/Mark-Carney-may-have-to-relaunch-QE-to-keep-down-interest-rates.html

    The only way to get growth is through new money. That comes from either exports or borrowing; government and/or private. Which do you think we have had to revert to in order to generate a feel good factor in the (long) run up to the election?

    Goodness it is grim up north isnt it. Allow yourselves to see and celebrate the good news. No matter who has brought it about. This is good news for everyone.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    Soupbowl wrote: »
    Goodness it is grim up north isnt it. Allow yourselves to see and celebrate the good news. No matter who has brought it about. This is good news for everyone.

    I'm not from the North. :)
  • jmclaughjmclaugh Posts: 63,988
    Forum Member
    ✭✭
    Growth forecasts should always be taken as being what they are, forecasts, and may or may not happen. However the prospects for the UK economy are certainly looking better.

    As for the Telegraph article the interest rate the government pays on its borrowing and the base rate are not the same thing and if Carney thinks he can force the markets to follow his guidance he is in for a surprise unless of course he thinks he can just print the money the government needs to borrow.
  • [Deleted User][Deleted User] Posts: 1,368
    Forum Member
    ✭✭✭
    WindWalker wrote: »
    And the reason the BoE think that might be the case?

    Mark Carney may have to relaunch QE to keep down interest rates

    The Bank of England is expected to take further action to ensure interest rates remain low after last week’s pledge failed to sway the market.

    http://www.telegraph.co.uk/finance/bank-of-england/10241750/Mark-Carney-may-have-to-relaunch-QE-to-keep-down-interest-rates.html

    The only way to get growth is through new money. That comes from either exports or borrowing; government and/or private. Which do you think we have had to revert to in order to generate a feel good factor in the (long) run up to the election?

    I hope we do have more QE.
    Having the Bank of England buy up UK government debt kills three birds with one stone, boosts the economy by causing an assst and credit bubble, reduces government debt owed to others, reduces government debt interest payments both by keeping government gilt rates down via reverse auctions and by the government not paying interest on UK gilts to the Bank of England. In the long-term I also expect once the structural deficit is dealt with so removing moral hazard, the UK government gilts owned by the Bank of England will be written out of existance. So helping reduce the national debt.
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    WindWalker wrote: »
    I'm not from the North. :)

    I bet you have northern heritage.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    jmclaugh wrote: »
    Growth forecasts should always be taken as being what they are, forecasts, and may or may not happen. However the prospects for the UK economy are certainly looking better.

    As for the Telegraph article the interest rate the government pays on its borrowing and the base rate are not the same thing and if Carney thinks he can force the markets to follow his guidance he is in for a surprise unless of course he thinks he can print the money the government needs to borrow.

    Which he has and it's what the BoE has been doing for decades. Of course, it's not called 'printing', it's just creating new money as debt...the normal state of affairs for banks.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    Soupbowl wrote: »
    I bet you have northern heritage.

    Nope and this interest in my location is, quite frankly, rather stalkerish.

    Any comment on the QE possibilities from the BoE or are you avoiding that for some reason...
  • jmclaughjmclaugh Posts: 63,988
    Forum Member
    ✭✭
    WindWalker wrote: »
    Which he has and it's what the BoE has been doing for decades. Of course, it's not called 'printing', it's just creating new money as debt...the normal state of affairs for banks.

    You are missing the point. A country can't just print money to finance its borrowing, if you want an example check out Zimbabwe.
  • [Deleted User][Deleted User] Posts: 1,368
    Forum Member
    ✭✭✭
    jmclaugh wrote: »
    As for the Telegraph article the interest rate the government pays on its borrowing and the base rate are not the same thing and if Carney thinks he can force the markets to follow his guidance he is in for a surprise.
    Which is why he might engage in more QE.
    QE reverse auctions should drive down the UK gilt rates.
    We seem to have ceased only using QE to increase money supply in the UK economy, we now appear to be willing to use QE to influence UK gilt rates.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    jmclaugh wrote: »
    You are missing the point. A country can't just print money to finance its borrowing, if you want an example check out Zimbabwe.

    That's why I said it's not called printing and went on to explain what it is. Printing money is monetizing debt, QE is buying existing debt with created money and creating and issuing money is done as debt with a signature to take responsibility for that debt. ie, government or private borrower. The money doesn't exist until a person wishes to borrow it, then it's created and lent out to them, remaining on the books until it has been repaid plus interest then the created sum is extinguished and the bank keeps the money paid on top of that, the interest. That extra money has to come from somewhere, either from a foreign country (export) or by someone else's money/borrowing.
  • [Deleted User][Deleted User] Posts: 14,922
    Forum Member
    ✭✭
    Which is why he might engage in more QE.
    QE reverse auctions should drive down the UK gilt rates.
    We seem to have ceased only using QE to increase money supply in the UK economy, we now appear to be willing to use QE to influence UK gilt rates.

    QE never really made it in to the 'high street' economy, it was used in markets, both here and abroad. That's why there have been spikes in bonds and stocks. The US talk of taper has caused problems in those markets and if it comes in autumn, then there will be a large exit.
  • [Deleted User][Deleted User] Posts: 1,368
    Forum Member
    ✭✭✭
    jmclaugh wrote: »
    You are missing the point. A country can't just print money to finance its borrowing, if you want an example check out Zimbabwe.
    The Bank of England has engaged in £375bn of QE.
    Yet UK inflation is only 2.8% CPI, 3.1% RPI.
  • SoupbowlSoupbowl Posts: 2,172
    Forum Member
    ✭✭✭
    WindWalker wrote: »
    That's why I said it's not called printing and went on to explain what it is. Printing money is monetizing debt, QE is buying existing debt with created money and creating and issuing money is done as debt with a signature to take responsibility for that debt. ie, government or private borrower. The money doesn't exist until a person wishes to borrow it, then it's created and lent out to them, remaining on the books until it has been repaid plus interest then the created sum is extinguished and the bank keeps the money paid on top of that, the interest. That extra money has to come from somewhere, either from a foreign country (export) or by someone else's money/borrowing.

    What i think you are fumbling about for is defining the term "money supply". Good news on that front too. This, as a measure of economic health is, and has been showing very positive signs for the last few months.

    Money supply- a measure of how much money within the economy is working, ie being traded, used for investment etc. It is the truest measure of economic recovery. If the money supply is in good health the QE will slow as it has been pitched at the correct level to get the cash working in the economy.

    You brought up the subject of not being from the north. So no need to flatter yourself.
  • jmclaughjmclaugh Posts: 63,988
    Forum Member
    ✭✭
    WindWalker wrote: »
    That's why I said it's not called printing and went on to explain what it is. Printing money is monetizing debt, QE is buying existing debt with created money and creating and issuing money is done as debt with a signature to take responsibility for that debt. ie, government or private borrower. The money doesn't exist until a person wishes to borrow it, then it's created and lent out to them, remaining on the books until it has been repaid plus interest then the created sum is extinguished and the bank keeps the money paid on top of that, the interest. That extra money has to come from somewhere, either from a foreign country (export) or by someone else's money/borrowing.

    Which is why I didn't call printing money QE. The BoE cannot force the markets to lend the government money at a particular rate of interest no matter how much QE it indulges in and nor can it force then into charging interest rates in the wider economy at levels it desires them to.
  • BrokenArrowBrokenArrow Posts: 21,665
    Forum Member
    ✭✭✭
    How much growth is required to to generate the £120B needed to fix the deficit.

    I think its probably in the order of 15..20%, just a guess mind you.
  • David TeeDavid Tee Posts: 22,833
    Forum Member
    ✭✭✭
    How much growth is required to to generate the £120B needed to fix the deficit.

    I think its probably in the order of 15..20%, just a guess mind you.

    By fix I take it you mean get rid of it? If so, I suspect you're on the right track. A government committed to maintaining cuts and targeting private sector growth would clear it in 6-7 years with annual growth between 2.5% and 3.0%. Assuming, of course, that nothing else came along to wreck progress in the meantime.
  • jmclaughjmclaugh Posts: 63,988
    Forum Member
    ✭✭
    How much growth is required to to generate the £120B needed to fix the deficit.

    I think its probably in the order of 15..20%, just a guess mind you.

    You are in the right ballpark, nearer 20%, as a 1% increase in the UK's annual GDP would generate about £6b extra revenue for that year to the Treasury. It explains why you can't grow your way out of a deficit that large.
Sign In or Register to comment.