Monetary policy· Macroeconomic policy Macroeconomic Policy Outlook: Q4 2022 10 December 2022 by Emily Fry and Sophie Hale and James Smith [1] The UK is experiencing high levels of inflation not encountered for 41 years, reaching 11.1 per cent in October. But what matters most for both people and policy makers is how persistent this inflation is, which will influence how long the cost of living crisis will last. This inflation has been driven by global … Continued READ MORE
Monetary policy· Macroeconomic policy The art of expectations management A bleak outlook from the Bank of England as it scales back rate hike expectations 3 November 2022 by James Smith The Bank of England has raised rates by 75 basis points today – the eighth successive increase and the largest since 1989 – to 3 per cent, the highest since November 2008. Despite this historic rise, the big news was that the Bank signalled very clearly that market expectations for further rate rises had gone … Continued READ MORE
Monetary policy· Housing Interesting times Assessing the impact of rising interest rates on mortgagors’ living standards 15 October 2022 by Lindsay Judge and Jack Leslie and Krishan Shah R. I. P. low interest rates: the cost of borrowing is seriously on the rise. Inflationary pressures in the economy have been pushing interest rates up for some time, and events since the Government’s mini-budget in September increased market expectations of how high interest rates will rise, and brought forward the date at which they … Continued READ MORE
Monetary policy· Macroeconomic policy Macroeconomic Policy Outlook: Q3 2022 10 October 2022 by Jack Leslie and Krishan Shah and James Smith In this edition of the MPO we consider the nature of the inflation challenge facing the Bank of England and the impact of the ‘Mini Budget’ on it. Here it is important to remember that the colossal scale of the energy shock – which for household incomes could be three times the size of that … Continued READ MORE
Monetary policy· Economic growth· Macroeconomic policy Slower for longer The Bank of England tightens monetary policy again and warns that the outlook is bleak 4 August 2022 by Jack Leslie and James Smith The Bank of England today unveiled the biggest rise in interest rates since 1995 along with plans to bring down the stock of Quantitative Easing (QE) by £80 billion over the next year. But the real news in today’s announcements was the extent to which the central bank expects the cost of living crisis to … Continued READ MORE
Monetary policy· Living standards· Macroeconomic policy In the dread of winter Prospects for inflation in the coming months ahead of the Bank of England’s Monetary Policy Report 3 August 2022 by Jack Leslie In the face of the highest inflation rate for 40 years, many are predicting that the Bank of England will announce the largest interest rate rise in 27 years this week. This spotlight focuses on the challenges and uncertainties facing both the Bank of England and UK families from rising inflation this winter. Contrary to … Continued READ MORE
Monetary policy· Economy and public finances· Tax· Macroeconomic policy· Political parties and elections Talking tax What’s been said and what’s gone unsaid in the Conservative leadership election? 26 July 2022 by Torsten Bell and Adam Corlett Elections are rarely entirely about a single issue, but there are exceptions. Brexit in the 2019 general election stands out, and today tax cuts totally dominate the 2022 Conservative leadership election. Judging by last night’s TV debate, the contest is staying that way, with little discussion of the huge questions facing the country, from the … Continued READ MORE
Monetary policy· Fiscal policy· Macroeconomic policy Crunch time Bank of England raises rates again and signals cost of living crisis is set to deliver a £1,200 hit to incomes 5 May 2022 by Adam Corlett and Jonathan Marshall and James Smith Today the Bank of England’s Monetary Policy Committee raised rates at a fourth successive meeting – a first in the 25 years since it was granted independence – to 1 per cent, a level not seen since the financial crisis. The direct impact of this change in rates on households will be small in the … Continued READ MORE
Monetary policy· Macroeconomic policy Macroeconomic Policy Outlook: Q1 2022 4 March 2022 by James Smith 2022 is shaping up to be difficult year for policy makers at the Bank of England. While the fastest recovery from a recession since the war is clearly good news, its unbalanced nature at home and abroad has led to a surprising and precipitous rise in inflation. The rise in inflation reflects a mismatch between … Continued READ MORE
Monetary policy· Macroeconomic policy What goes down must come up The Bank of England becomes the first major central bank to raise rates but impact will be small with fiscal policy key to Omicron response 16 December 2021 by Jack Leslie and James Smith The Bank of England performed a ‘bait and switch’ by not raising rates in November when many people expected they would, but then raising them today when many thought the rise of Omicron would mean that they would wait to see the impact of the new wave. Many commentators have focussed on the high current … Continued READ MORE
