Bank Base Rate remains at 0.1%

by Neil Patterson

17:05 PM, 17th September 2020
About a month ago

Bank Base Rate remains at 0.1%

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Bank Base Rate remains at 0.1%

The Bank of England Monetary Policy Committee (MPC) voted unanimously to maintain the Bank Base Rate at 0.1% and for the quantitative easing stock to remain unchanged.

Economic outlook is particularly uncertain, but the bank’s central growth projections still assume the direct impact of Covid-19 on the economy will dissipate gradually and assume an immediate, orderly move to a comprehensive free trade agreement with the European Union on 1 January 2021. CPI inflation is expected to be around the 2% target in two years’ time.

UK GDP in July was 18.5% above the low in April and remains 11.5% below its 2019 Q4 level. 2020 Q3 GDP expectations are around 7% below its 2019 Q4 level, which is less weak than had been expected in the August Bank report.

12 month CPI inflation fell from 1.0% in July to 0.2% in August, consistent with temporary impacts on inflation from the Government’s Eat Out to Help Out scheme and the cut in VAT for hospitality, holiday accommodation and attractions. Therefore, these low inflationary figures are expected to filter out in the short term.

Recent economic data has been a little stronger than the MPC expected, although, given the risks, it is unclear how informative they are about how the economy will perform in the future. The recent increases in Covid-19 cases in some parts of the world, including the United Kingdom, have the potential to weigh further on economic activity, albeit probably on a lesser scale than seen earlier in the year.

The MPC intends to monitor the situation closely and will keep under review the range of actions that could be taken. The Bank does not intend to tighten monetary policy by increasing interest rates until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target over the medium term.


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Question Everything

13:42 PM, 18th September 2020
About a month ago

Does anyone buy this nonsense? Not a comment upon Neil, thank you for the update.
If on 19 March C-19 was downgraded to not being an HCID (High consequence infectious disease), then what has the rest of the last 6 months been about?
https://www.gov.uk/guidance/high-consequence-infectious-diseases-hcid#status-of-covid-19
Death rates are no worse than any flu season, and we haven't locked down for those. We also have no made a media debacle over it either.
Why then have we had our livelihoods decimated? Why have we had our children's educations halted? Why are we being threatened and told we will have to have a vaccination. One that will be out very soon, and will forgo the usual safety testing.
Here is a report from the Swiss Policy Research on C-19 which shows the insignificance of C-19
https://swprs.org/facts-about-covid-19/
When you see that this is no more than a flu type situation, it makes you question why the great fuss. The BOE is just leveraging a load of nonsense to get away with what it wants. As are .gov and and all Central Banks and .govs around the world.
Some things to note about Central Banks;
The magic 2% inflation figure has no bearing on reality and is purely a mechanism for depreciating the value of debt. This is good for those who hold hard assets, property included, but is terrible for savers. This means they can allow 2% per year currency creation to purchase assets at no cost to them and the banks.
The asset you bought for £100 last year, is now worth 102%, but the money you had is only worth 98% of this years £100 pound asset. (give or take)
I would liken the 2% to the rate at which you can "boil a frog". We unknowingly slip into further debt unless you buy (solid) assets, but the more people who buy assets the more the assets rise, which means the greater the distance between haves and have nots. (not a political comment, just showing the mechanism)
The real domestic (CPI) inflation is significantly higher than 2%, it is more like 10%+. Look at the price of fuel, rent, property, cars etc. The method they use to calculate CPI is manipulated. The analogy is they replace steak with spam and say that meat has gone down or stayed flat.
So if you the magic 2% "target" is just a brainwashing exercise, it makes you think they have something solid and benign behind it.
And where have wages gone in 20 years? Only up for the CEOs, that's because the asset values of their companies shares have gone up. Why have they gone up? Because that's the mechanism, cheap loans to buy assets which outgrow the magic 2%/annum which means it is effectively free money. Or of you like, counterfeiting.
What is the crime that counterfeiters commit? The devaluation of currency. What do Central Banks do with their policies? QE is currency devaluation in warp speed.
What yields are being produced? What reality is there in the asset prices against yield or rent or average wages? Taxes go up but wages have stagnated, and shrinkflation has become the norm to hide the real inflation.
This is all about the perpetuation of a debt economy (Not capitalism, Adam Smith would be vomiting in his grave). The reason why we are in a debt economy is because it is a great way to keep us on the treadmill. Everyone here who bought property as an investment were trying to get off the treadmill. This has been recognised and so the hammer has come down on the PRS in many ways.
This is far from over. C-19 is the mechanism for the economic rug being pulled from under your feet. Nail it down before they do.
Buy scarce hard assets, gold, silver, bitcoin. Property is still scarce in the UK, just watch the leverage and be sure you have good yield.
Last note for Ranjan who subs at this sort of rhetoric. Thank you for your videos, but why do you think we now have these new PD commercial/residential schemes? Small business are shutting, they are not coming back. Corporation are taking over and they are keeping afloat by share buy-backs and 0.1% loans direct from their mates. Tesco will be fine, but the little corner shop is history.
.gov needs more residential property, they know there will be a flush of ex commercial. It is also a get-out-of-gaol for the commercial landlord who finds his tenants have no business to pay rent.
This is in turn is a get-out-of-gaol for the banks. The current situation with commercial Mortgage backed securities is as it was with residential securities in 2008.
There is a very good reason for all the machinations of .gov and central banks, and when you realise they are not in the business of caring about you, you understand the truth about what they are doing. Too many people are still in the belief that .gov is benign. They may think they are incompetent or stupid, but that is the wolf in sheep's clothing.


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