From: Richard Faulkner 
Newsgroups: uk.finance
Subject: Re: Property Prices down in August!!
Date: Wed, 31 Aug 2005 00:46:21 +0100

In message , curiosity 
 writes
>On Mon, 29 Aug 2005 17:15:00 +0100, Richard Faulkner 
> wrote:
>
>>Just seen this headline on Radio 5 Live.
>>
>>Anything which puts downward pressure on interest rates is good, as far
>>as I'm concerned.
>
>Whatever it is you're smoking perhaps you could pass it round?
>
>And when the effects have worn off you should read this.
>
>http://news.independent.co.uk/business/news/article308775.ece
>
>Inflation may run out of control - King
>Bank of England Governor warns that householders may overreact to 
>economic
>shocks
>By Julia Kollewe
>Published: 29 August 2005
>The Governor of the Bank of England has warned that inflation could 
>spiral out of control if economic shocks such as an oil price spike 
>jolted consumers' faith in stable prices.

I dont pretend to understand all this economic mumbo jumbo but surely, 
if inflation is caused by an outside influence, like oil prices, raising 
interest rates will not serve to curb it.

AFAIK rising prices would tend to a reduction in consumer spending and 
business investment, therefore interest rate rises would not be 
necessary to slow these. In fact, interest rate reductions would be more 
sensible in order to encourage spending, and to take some of the heat 
out of the inflationary pressure

????

-- 
Richard Faulkner