The Old Lady’s Monetary Policy Committee has backed the stable horse as had been much predicted, following last month’s quarter per cent cut.
The European Central Bank has also held its main rate steady - at 4%.
The City’s reaction was a brisk pick up in trading followed by the FTSE falling to another new low.
What’s going on? Well, the index of UK manufacturing output prices is at its highest point since it started counting back in 1999 - one of the many good reasons why we are trying to walk the fine line between growth and inflation.
This leaves struggling homeowners facing the same issues they were before lunch: rising costs all around them and uncertain house and equity prices. If you see them praying, it’ll be for next week’s budget.
In the long-term absence of the traditional model of an inverse correlation between interest rates and equity yields where should we be investing?
1 comment so far
1 Allen Taylor // Mar 7, 2008 at 7:34 am
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Allen Taylor