Personal Finance: How can they spend a day and a half on just a quarter point cut?

GIVEN THE choice between attending the Bank of England's Monetary Policy Committee meeting this week or going to the monthly meeting at the Talbot Investment Club in Suffolk, there would, frankly, be no contest.

Aside from the jollier conversation that bounces around the table in the Sudbury Institute Club, and the excellent meal in which we indulge afterwards, I am unlikely to ever be invited to an MPC meeting. I think that is probably just as well.

How they can spend a day and a half arguing the finer points of economic theory, with just a quarter point cut resulting, beats me.

I suspect the phone lines have been hot between centres of government. I can just imagine the call from Washington. "Hi, is that you Ed? This is Al. Hey, how about helping me out some and bringing your bank base rate down. It sure as hell sends a signal to the rest of the world!"

"Well, Al, it isn't up to me alone, you know. There are eight of us that have to make this decision and some of the others are still hung up on inflation."

And you can be fairly certain that Gordon would have had a word or two to say about interest rate policy. The thought of entering the run-up towards the next election with high and rising unemployment and a falling tax take, demanding an even tougher approach to public spending, does not bear thinking about if you are a politician.

Actually, Roger Bootle, the leading economist who forecast the death of inflation, takes the rather pessimistic view that no amount of action will stop a bout of healthy deflation in the developed world. He points to the fact that history has always delivered falling prices after inflation- and boy have we had inflation in the past half century. But I do not share his pessimism. Even so, the market is sufficiently windy to deliver some fairly hair-raising swings: 200 points up, 200 points down - what is a poor investor to do? At our investment club meeting we discussed bonds, but yields have now fallen to the point where it is hard to become too enthused.

The trouble with buying even dated British gilts these days is that there is a built-in capital loss occasioned by the fact that they were all issued when yields were much higher. I detect some bottom-fishing out there in the equity market, but the game is far from over. but whether I am brave enough to start shovelling my pension fund money into the market is another thing. Still, timing is the hardest thing to get right in markets, which is why pound cost averaging is such a boon to the long-term saver. It might even be worth an article.

Brian Tora is the chairman of the Greig Middleton investment strategy committee

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior Analyst - ALM Data - Banking - Halifax

    £350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

    Java developer - Banking - London - Up to £600/day

    £500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

    Liquidity Reporting-Basel III-LCR-Bank-£400/day

    £400 per day + competitive: Orgtel: Liquidity Reporting - Basel III - LCR - Ba...

    Client Services Associate (MS Office, Analysis, Graduate)

    Negotiable: Harrington Starr: Client Services Associate (Microsoft Office, Ana...

    Day In a Page

    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain
    Ebola epidemic: Plagued by fear

    Ebola epidemic: Plagued by fear

    How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
    Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

    From 'Parks and Recreation' to 'Guardians of the Galaxy'

    He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
    How live cinema screenings can boost arts audiences

    How live cinema screenings can boost arts audiences

    Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
    Shipping container hotels: Pop-up hotels filling a niche

    Pop-up hotels filling a niche

    Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
    Native American headdresses are not fashion accessories

    Feather dust-up

    A Canadian festival has banned Native American headwear. Haven't we been here before?
    Boris Johnson's war on diesel

    Boris Johnson's war on diesel

    11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
    5 best waterproof cameras

    Splash and flash: 5 best waterproof cameras

    Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
    Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

    Louis van Gaal interview

    Manchester United manager discusses tactics and rebuilding after the David Moyes era
    Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

    Will Gore: Outside Edge

    The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
    The children were playing in the street with toy guns. The air strikes were tragically real

    The air strikes were tragically real

    The children were playing in the street with toy guns
    Boozy, ignorant, intolerant, but very polite – The British, as others see us

    Britain as others see us

    Boozy, ignorant, intolerant, but very polite
    How did our legends really begin?

    How did our legends really begin?

    Applying the theory of evolution to the world's many mythologies
    Watch out: Lambrusco is back on the menu

    Lambrusco is back on the menu

    Naff Seventies corner-shop staple is this year's Aperol Spritz