Rate hike bets

[duncan drennan]

The monetary policy committee is meeting today and tomorrow, so let's put out bets on the table.

From all the data so far it looks like we are headed for a rate hike, the question is how big? The economists have their money on 50 basis points, but how often have they been wrong?

I'm going to stick my head out a bit, and put my money on 100bp

What's your bet?

[Dave A]

I'll go with 50, although with all the pain cued up to come I wouldn't be that surprised if an increase was put off right now.

It's hard to see how an interest rate increase is going to turn CPIX trends right now - there are just too many important "above 6%" cost increases that need to filter through.

Personally, I think we've missed the boat to turn this trend and keep CPIX under 6% using the interest rate instrument. Interest rate increases now are just going to be an additional cost that needs to be factored into price increases. Most of the credit is pretty much locked in and the credit binge is over anyway.

It's time to pay the piper.

[stephanfx]

Having not such a great understanding of all factors (YET), and just listening to what is being suggested, I would go with 50 BP.