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ECB rate cut?


feargach

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Dec 11, 2006
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Apparently this rumour is doing the rounds.

Well the fact remains that the current situation is like a Tory rightwinger's sauciest fantasy made real. The ECB has been pushing, as hard as it can, for a situation in which the Eurozone's only affordable sunny destinations are sorely tempted to say "sod it", form their own breakaway rebel union, and devalue their way to solvency.

So much for the macro picture. The micro situation is that such an eventuality would set the stage for an early recovery, and possibly a rennaissance in FF support.

It's not out of the question that a period of high job creation could happen in such a scenario. And, of course, it will slow or even reverse the number of mortgages slipping into arrears. A good time to call an election to minimise losses.

It's all rumour and supposition at this point, of course.
 


toughbutfair

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I would be amazed if there was a cut. However, if a tracker mortgage guy like me can save more money - then cool, also it would reduce the EURO so good for exports.
 

Edo

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When do the French and German economic figures come out this week?

Because that is only thing that will determine the direction of the ECB.
 

feargach

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FT.com / Investor's notebook - Could the ECB cut rates?

"Mr Barrow says the key is the economic outlook – crucially, inflation.

“Despite a recent rise in headline inflation, core prices have been benign. Growth also seems to be faltering. In addition, there are budget tensions in the eurozone.

“While the ECB will clearly not maintain policy largesse solely to aid the deficit fight of Greece and others, throwing this issue into the low inflation and weak growth mix increases the odds of a rate cut.”"
 

taurus

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Apr 23, 2009
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Even if there was a cut would it be passed on by the (profanity) in Irish banks ????
 

feargach

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Tombo

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Even if there was a cut would it be passed on by the (profanity) in Irish banks ????
Surely people have learned something about how the banking system works by now.

In order to "pass something on" you need to receive it in the first place. I doubt a cut in the Refi rate will have any material impact on the cost of funds for Irish banks.
 

seanmacc

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The only reason I would see a cut is to save the likes of the Greeks, Spanish and ourselves who are up s**T creek without a paddle. A default or collapse on any of these countries could spell disaster for the reputation and stability long term for the euro.

Personally I think there will be a slight hike to ease German fears of an inflationary spiral.
 

hammer

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UK still at .5% and they are .001% out of recession

We need rates to be 0% and we need to spend what we save, ( which wont happen ) :)

December ( 12 months ) figures down 18%
January / February - will definitely be down on last year. 100% definite.
 

onlyasking

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Dec 19, 2008
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Euro sliding in value. Rate cut adds to the slide. Euro in freefall. No rate cut now.

Our EU and ECB masters may in most cases be a lamentable bunch of neo-liberal fools who were caught cold by the unravelling of the markets they'd been worshipping, but I don't think they'll be lowering rates in the current circumstances.
 

feargach

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The Euro being in freefall is only an entirely bad thing if you don't want to export outside the eurozone. Think Airbus. Think BMW.
 
D

Deleted member 17573

The only reason I would see a cut is to save the likes of the Greeks, Spanish and ourselves who are up s**T creek without a paddle. A default or collapse on any of these countries could spell disaster for the reputation and stability long term for the euro.
Personally I think there will be a slight hike to ease German fears of an inflationary spiral.
Would you say the same about certain U.S. states vis a vis the dollar?
 

seanmacc

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Would you say the same about certain U.S. states vis a vis the dollar?
California is in severe budgetary trouble and it is unthinkable that the Federal government will let them fail. Granted they are an economy similar in size to Germany.
A lot of the smaller states are going down the tubes also. Tennessee, Oregon and Kentucky being notable mentions, they don't have an IMF to be afraid of. The Fed will quietly move in to save them one by one but will not adjust economic policy to help them, unless its Detroit Michigan (Vital to the industrial military complex)
 

Hillmanhunter1

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California is in severe budgetary trouble and it is unthinkable that the Federal government will let them fail. Granted they are an economy similar in size to Germany.
A lot of the smaller states are going down the tubes also. Tennessee, Oregon and Kentucky being notable mentions, they don't have an IMF to be afraid of. The Fed will quietly move in to save them one by one but will not adjust economic policy to help them, unless its Detroit Michigan (Vital to the industrial military complex)
Spot on. The ECB and the Commission will deal with this, and with Spain if necessary. The IMF will not figure.
 

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