The Bank of England’s decision to cut UK interest rates to 5% this week was finely balanced but surely correct. The aim now should be to return rates to a 'neutral' level of around 4% early next year. The obvious starting point is that CPI inflation has now been at or very close to the … Continue reading Bank of England rate cut should be the first of many
Category: Everyday Economics
Thoughts on inflation, interest rates – and a surprise July election
Some personal reflections on today’s news (as usual, all views here are my own only). First, the economics. The fall in UK inflation from 3.2% to 2.3% in April was slightly smaller than expected, but still another big step in the right direction. Admittedly, the ‘core’ rate excluding food and energy, at 3.9%, was still … Continue reading Thoughts on inflation, interest rates – and a surprise July election
A ‘glass half full’ take on the Budget
There has been the usual blizzard of commentary on last Wednesday’s Budget – most of it negative – which continued over the weekend. For chapter and miserable verse, try the IFS or the Resolution Foundation. This piece will reflect instead on three positives and offer a quick verdict on some of the individual announcements. The … Continue reading A ‘glass half full’ take on the Budget
Two forecasts for 2024: 2% inflation in April and 4% interest rates by year-end
The tick up in UK CPI inflation to 4.0% in December last year was an unwelcome surprise, but one small miss in one month’s data does not change the big picture. For a start, inflation is still lower than the Bank of England had been forecasting. The November Monetary Policy Report assumed that inflation would … Continue reading Two forecasts for 2024: 2% inflation in April and 4% interest rates by year-end
Plain-speaking Economics 