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
Category: Monetary policy
Red Sea crisis is unlikely to blow inflation off course
The disruption to shipping through the Red Sea – and the possibility of a further escalation of the Middle East crisis – are serious threats to the global economy. Nonetheless, the wider fallout should be limited. UK inflation might sink a little more slowly than it would otherwise have done, but it should continue to … Continue reading Red Sea crisis is unlikely to blow inflation off course
How much should we fear the return of the ‘bond vigilantes’?
BlackRock’s UK chief investment strategist, Vivek Paul, has warned this week that pre-election promises of large tax cuts or spending increases could unsettle the bond markets again. There are clear echoes here of the turmoil that followed the Truss/Kwarteng mini-Budget back in 2022. But how worried should we be? These warnings should not be dismissed … Continue reading How much should we fear the return of the ‘bond vigilantes’?
‘Economic Overview’ (presentation)
In case of wider interest, here are the slides from a presentation I made yesterday to the Shadow Monetary Policy Committee, hosted by the IEA. The SMPC is a group of independent economists whose purpose is to monitor the decisions of the Bank of England’s official Monetary Policy Committee and to make policy recommendations of … Continue reading ‘Economic Overview’ (presentation)
