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: Labour markets
Has the Bank of England missed the boat?
The global interest rate cutting cycle has begun, but there is little sign that the Bank of England is ready to jump on board. How much longer will the UK have to wait? This question became even more pressing last week when the European Central Bank (ECB) trimmed official rates in the euro area for … Continue reading Has the Bank of England missed the boat?
A manifesto for growth
One positive legacy from the brief premiership of Liz Truss is that politicians are finally talking about the importance of economic growth. Unfortunately, there is little agreement on how to turn this talk into action. My manifesto would be based on four priorities: rebooting productivity; removing blockages that add to the cost of living; improving … Continue reading A manifesto for growth
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 