One of the oddities about the narrative on the direction of interest rates is the argument that, because consumer price inflation is still above the 2% target, the Bank of England cannot cut interest rates. That suggests that interest rate policy changes immediately impact the current inflation rate in the short term. However, this view …
Bank of England in the news – its arguments do not stack up
In recent weeks Bank of England officials have made comments which have garnered lots of attention. I want to focus on four of those because they show different aspects of the Bank of England’s views that economists usually debate without much public fanfare. But since they have gone public, it’s worth discussing them in this …
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A Budget for ‘Growth’ or for ‘Stability’
Today’s UK budget is called ‘the budget for growth’ with the four E’s of enterprise, education, employment, and everywhere. Jeremy Hunt heavily trailed the latter in a speech he made at Bloomberg’s offices in January. Many of the proposals in the Budget were as expected and were known by the media. In other words, there …