More monetary stimulus will not help the world economy return to strong growth, former Bank of England governor Mervyn King said, days before the European Central Bank is expected to decide whether to embark on a massive bond-buying programme. This is a report from the Telegraph today. (more…)
For the UK economy I think the phrase was spot on from the chief economist of the Bank of England, Andy Haldane, when he described it as being in a position of both agony and ecstasy. For the ecstasy we now have an economy that is currently growing faster than any other developed economy on the globe. A rate of 3.1% for this year is expected and that for the UK is quite a pace, although obviously nowhere near the dynamic rates of the developing nations. In fact for the UK’s it could be described as running quite hot – especially when you consider not just the QE money pumped into it but the £22.2bn plus set aside for consumers’ claims from the PPI scandals. Whilst growth next year will likely ease to 2.4% according to the EY Item Club, this is hardly agony, although ecstasy would not be a sensible description either. Reasonable is more truthful, although sustainable would be better. (more…)
UK economic growth in the first quarter was helped by the fastest expansion in business investment in two years, official figures have shown. (more…)
UK INFLATION FALLS TO 2% TARGET RATE!
The UK’s inflation rate, as measured by the Consumer Prices Index, fell to 2% in December, down from 2.1% the month before.
It is the first time inflation has been at or below the government-set target of 2% since November 2009. (more…)
The provisional UK economic growth figure for the third quarter of 0.8% was in line with market expectations, but no less welcome for that. As the graph shows, the UK economy has made a stuttering recovery from the financial crisis, but now appears to be gaining some momentum.
According to the Bank of England, economists assume interest rates will rise and move toward equilibrium or a ‘natural’ real rate of interest that takes into account inflation over the long term.
The new Governor of the Bank of England, Mark Carney, came to the job with a ‘rock star’ central banker reputation which his predecessor, Sir Mervyn King, lacked. Mr Carney was expected to reform the Bank’s policies and in August he took a major step in this direction.
The Bank of England put its neck out and did a fair imitation of the U.S. Federal Reserve last week when it offered forward guidance tying tighter monetary policy to unemployment levels.
