Topic: interest rates

[ACE]

I listened to the radio this morning and was amazed that the monetary experts that set the interest rates had  some for and some against ???

Surely they should all be of one mind, as they are the so called experts and there should be no indecision at all. No wonder we are going to the dogs when the top men do not know the answer.

[BarriedaleNick]

The problem is that (despite what the economists say) economics is not a science.  In other words there is no one answer.
Raising interest rates has a number of effects and depending on the relative strength of those effects (which are in turn dependent on unknown variables) the desired result may are may not be achieved.
At the moment inflation is high and the "cure" is to hike rates which tends to suck money out of the economy into savings (and higher debt payments).  However it also has a dampening effect on growth which in a recession is undesirable.  Also if as expected inflation is likely to come down in the next year pushing up rates could be a waste of time. 
In short no one really knows the answer - there are only opinions and possibilities!

[mat]

exaclty, that's why there's a panel to guage and moderise opinions and views.  As per a jury in a court case...

[tonybloke]

the interest rate is falling, because less folk are interested in monetary policy.

[OllieC]

I agree with Nick, although I would say it's not an exact science. Plenty of scientific evaluation is far from 100% certain, and this is something non scientists struggle with. Man made climate change, for example, is scientific but only around 85% certain (we'd be nuts to go for the other 15% but plenty do!). I think a lot of the media are to blame for teaching us that the world is full of black & white certainties. As with climate change, there are many variables & many unintended consequences of action or inaction & many people on both sides of the camp have a vested interest in telling us what is best.

[BarriedaleNick]

exact was exactly the word I was groping for!  ;D

[rugbypost]

Lot of replys there ACE and still no answers hell of a job this politics I always thought the winner was the one who said the biggest lie and got away with it