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
Tag: quantitative tightening
Rate cuts are coming, but the markets may have to force the Bank’s hand
The Bank of England’s decision to leave interest rates on hold this week was no surprise. However, there is still little sign that policymakers are thinking of cutting rates any time soon, despite stagnant growth and falling inflation. Indeed, three of the nine members of the Monetary Policy Committee (MPC) voted again for another quarter … Continue reading Rate cuts are coming, but the markets may have to force the Bank’s hand
The Treasury should look again at a simple option to save on debt interest
The latest monthly data on the UK’s public finances included the first of many payments from the Treasury to cover losses made by the Bank of England’s Asset Purchase Facility (APF). This may seem like an arcane subject, but the sums are huge and at least partly avoidable, so bear with me. First, the technical … Continue reading The Treasury should look again at a simple option to save on debt interest
Podcast on UK inflation and monetary policy
I recorded a podcast for the Institute of Economic Affairs (IEA) on Friday 6th May on UK inflation, definitions of 'recession' and 'stagflation', and what more the Bank of England could (and should) have done. You can listen here... https://ieapodcast.podbean.com/e/interest-rates-how-to-control-inflation/
Plain-speaking Economics 