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Will they raise the base rate? Part 2

By Andy Shaw | January 23, 2010

Originally posted 3rd July 2008

These people know what they are doing so if you are going to America shortly then I would change your money before Thursday at 12.00pm as it stands at $2.015 for just £1. Me, if I was a betting man would be looking at putting a short in place on the currency as the whole market seems to be pointing towards a rate rise then this would make staying static a contrarian bet.

In other words I think that the rate is likely to remain the same which will mean the pound will fall marginally against the dollar. Only a cent or two which seems like nothing to you or me, but to the currency players this could be a good pay day.

This is obviously assuming I’m right and the chancellor doesn’t want an interest rate rise in his first full week as PM. Not that he has any influence of course :-)

I also think that the bank will be thinking well there are signs emerging that the economy is showing signs of the rate rises and as such they will decide to wait and see for another month. I think this would be a much more sensible approach, then when you add into it that this may do the new PM a favour and they do like to do things against what the market thinks then I’d say the rates are today looking more likely to stay on hold, but that’s only because I see things from a weird perspective.

Then there was a bit about how the terrorist attacks have made Gordon’s approval rating ’soar’ in a poll. And that 77% of people now see him as a strong leader.

When I studied 20th Century history I learnt that a leader when faced with economic trouble at home would always try and take the countries attention off of the worsening scenario by going to war with another country instead. That’s a generalisation of course but the tactic of misdirection has been used in politics to devastating effect.

For Example the Falklands war breathed new life into Mrs Thatcher’s conservative government and this in itself was the Argentine leader’s way of misdirecting his people from their economic troubles.

So all Gordon needs is a few terror attacks and our security forces to do very well in stopping further problems and that should mean that he can call an early election next year. Still that’s only a guess at this stage though.

Andy

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Topics: Free Content, Government, Property, The Economy | Comments Off

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