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
Category: Monetary policy
UK economy ‘turns the corner’
First, the good news (and the news is mainly good today). The unexpectedly large 0.6% bounce in GDP in the first quarter of the year means that the UK economy has officially exited ‘recession’, after declines of 0.1% in Q3 and 0.3% in Q4 2023. This has already led to some more positive headlines, which … Continue reading UK economy ‘turns the corner’
Bank of England tees up rate cuts – at last
The Bank of England’s Monetary Policy Committee (MPC) left its key interest rate on hold at 5¼% this week, as expected, but there are some clear signals that cuts are coming soon. For a start, Dave Ramsden (Deputy Governor for Markets and Banking) joined Swati Dhingra in voting for an immediate reduction to 5%. This … Continue reading Bank of England tees up rate cuts – at last
Bank of England edges towards a summer rate cut
The Monetary Policy Committee’s decision to leave interest rates on hold at 5.25% this week was unsurprising, but there were some welcome hints that cuts are coming soon. The market reaction was consistent with the slight dovish tilt: 2-5 year government bond yields fell about 5 basis points (these correlate closely with the cost of … Continue reading Bank of England edges towards a summer rate cut
Plain-speaking Economics 