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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (34363)	7/28/2005 10:51:36 AM
From: Crimson Ghost	Read Replies (1) \| Respond to of 116555

If one looks at the proposals of the Democratic Leadership Council their only serious disagreement with the Bushies on iraq is that George has not sent enough troops to suit them. As George Wallace used to say regarding the Dems and the GOP -- there ain't a dimes worth of difference between them. Both parties are committed to an imperialist foreign policy just like they both love Alan Greenspan's brand of bubble economics.

To: Knighty Tin who wrote (34363)	7/28/2005 2:36:05 PM
From: mishedlo	Respond to of 116555

OUTLOOK BoE poised to cut rates for first time in over two years Thursday, July 28, 2005 1:56:20 PM afxpress.com LONDON (AFX) - The Bank of England is poised to cut borrowing costs for the first time in over two years when it concludes its next rate-setting meeting next Thursday All but four of the 36 forecasters polled by AFX News expect the nine-member Monetary Policy Committee to cut the key repo rate by a quarter point to 4.50 pct, largely in response to subdued economic growth figures That would be the first change in policy for a year and would represent the first actual reduction since July 2003, when interest rates fell to near-50 year lows of 3.50 pct The MPC raised the cost of borrowing a quarter point on five occasions between November 2003 and August 2004 as it sought to stem inflationary pressures arising from above-trend growth and rampant consumer demand However, it has kept interest rates on hold since last August as evidence of some sort of economic slowdown, particularly in the consumer sector, emerged At July's MPC meeting, four members voted for a cut, including the central bank's chief economist Charlie Bean, with the governor Mervyn King casting the deciding vote in favour of unchanged rates The minutes to the meeting more or less cemented market expectations that a cut is in the offing in August, especially as the BoE publishes its quarterly economic projections within the Inflation Report. The report is expected to show both the inflation and growth profiles reduced from the May version "While July's MPC minutes reminded markets that the committee has an inflation target to hit and not a growth target, the reality is that the necessary downward revisions to growth would have a fundamental knock-on effect to the Bank's inflation projections," said David Page, economist at Investec Securities "On this basis, a cut in rates next week becomes very easy to rationalise," he added Official figures last week confirmed that the UK economy grew by a quarterly 0.4 pct in the second quarter. That pushed the year-on-year rate down to 1.7 pct, its lowest rate since the first quarter of 1993, when the UK was emerging from its last deep recession Despite the subdued growth data, a few analysts reckon that there hasn't been enough bad economic news since the July meeting to merit a change in voting behaviour. They noted that there has been some surprisingly strong economic news in recent days, particularly regarding the state of consumption, as well as a sharp fall in the pound Melanie Baker, an economist at Morgan Stanley, said the surprisingly strong retail sales report for June, which showed volumes rise a monthly 1.3 pct, may be enough to keep the votes as they were in July "The data was a reminder that the UK consumer remains some way from collapse," she said Richard Jeffrey, a director at Bridgewell Securities, urged the MPC to withstand the "psychological pressure" to cut rates and noted that a "natural rebound" is likely in the months ahead as the impact of previous interest rate increases diminish He explained that the main impact of an interest rate hike usually takes place 9-12 months after the event, meaning that the effect of last August's quarter-point hike is set to decline in the coming months, thereby promoting economic activity automatically