The US Federal Reserve or Fed, and the UK Central Bank or the Monetary Policy Committee (MPC,) both made the decision on whether to cut interest rates on the same day, although, given the time difference, it happened at different points. The US Fed cut interest rates by ½% to a range of 4.75% to …
Interest rates can be cut now
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 …
Another turbulent year looms – but so do opportunities
Last year was turbulent for the world economy, and this one may be no different. The Russian invasion of Ukraine in 2022 had its full effect in 2023, reducing real incomes by pushing inflation up, particularly for food and energy. In addition, interest rate increases, put in place to fight the sharp rise in inflation, …
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