News reaches us that "Sir" John Gieve, member of the Monetary Policy Committee, voted for an immediate rate cut at the last meeting of the Bank of England.
Woody would like to remind people that Gieve has a track record as an irresponsible idiot. He was Permanent Secretary at the Home Office when Blunkett tried to fast-track his nanny's visa but conveniently 'couldn't remember' how it happened. That earned him a knighthood.
He was still Perm Sec when the Home Office was accused of colossal financial mismanagement. He was also personally involved in the (now forgotten) release of a thousand foreign prisoners who should have been deported.
Needless to say this qualified him for a plum job on the MPC, particularly as at the time GB really needed to get rid of Andrew Large who was far too hawkish for his liking.
He's an idiot and a stooge, probably under direct orders from the Clown himself to reignite the economy.
So if Gieve voted for it it's almost certainly the wrong thing to do. Fortunately it seems likely that other factors will prevent rates from coming down anyway.
1. Sterling is relatively overvalued, making it much harder to cut rates without immediately importing inflation. (This is not the case with the dollar.)
2. Commodity inflation has been soaring and will continue to do so while the yuan is so under-valued.
3. King doesn't want to be seen to make the same mistake as in 2005 when an injudicious rate cut prompted the property market to take off again. Unlike Gieve, King is no idiot.
So rates will probably stay on hold until well into the New Year at least.
NB Woody is quite happy to be debt-free and renting for the time being.
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