Wednesday, September 12, 2007
The Bank on the turmoil
Posted by David Smith at 10:15 AM
Category: Thoughts and responses

The Bank of England has provided its most detailed response yet on the crisis in credit markets. Other things being equal, the tightening of credit conditions will lower inflation, it says, but the extent of that is so far uncertain. It says that the crisis should not threaten Britain's long-run economic stability. The paper, to the Commons Treasury committee, is here.


Dear David,
Arguably, the key-word here is "long-run" (economic stability). Instead, the BoE aims at hitting the inflation target in the medium run; this leaves the window (slightly) open for an interest rate move in the forthcoming months.
Many thanks

Posted by: Costas Milas at September 13, 2007 09:54 AM

Hi all,

if you have any idea of what will the FED do on September, 18th on the light of the recent market turmoil, feel free to leave your vote on my blog's poll at:



Posted by: Bernardo Aito at September 13, 2007 10:04 PM

I said on your blog before that the housing market was mostly based on speculation. Demand that 'was' propping up the the market was created by cheap and easy money, much less a lack of supply. Your affirmation was that a crash would only occur following a financial shock. The shock albeit a 'long slow one' was the increase in the price of oil and other commodities that led to rate rises that led to sub prime defaults that exacerbated the U.S house price slump etc etc....
London house prices are going down....30% per annum? We are looking right down the barrel.
Will you tell it like it is....or keep repeating the party line??

Posted by: Renter 4 Armageddon at September 14, 2007 01:55 PM

Stupid. There's no party line. I'll keep telling it as I see it.

Posted by: David Smith at September 14, 2007 02:41 PM