UK Economics Focus When can the MPC relax on inflation? A key factor preventing the Monetary Policy Committee from cutting interest rates further has been the threat that last year’s rise in CPI inflation will have knock-on effects on inflation... 30th January 2006 · 1 min read
Europe Economics Focus Where will euro-zone rates peak? ECB President Jean-Claude Trichet said little new in his testimony to the European parliament today. But whether the ECB begins to raise rates in December (as now seems likely) or early in 2006, there... 21st November 2005 · 1 min read
Europe Economics Focus Is the ECB keeping government bond yield spreads low? A number of commentators have argued that the ECB is inadvertently keeping euro-zone government bond yield spreads artificially low because of the way it provides liquidity to the banking system. In... 19th October 2005 · 1 min read
UK Economics Focus Is the switch to CPI blocking rate cuts? The switch to the consumer prices index as the targeted measure of inflation in 2003 may be having unintended and unfavourable effects on the UK economy by keeping interest rates higher than they... 22nd September 2005 · 1 min read
Europe Economics Focus Should Italy leave EMU? The fact that Italy’s economic under-performance is linked to the weakness of its external sector prompts the question of whether Italy should leave EMU to allow its currency to depreciate and regain... 20th September 2005 · 1 min read
UK Economics Focus Making the most of lower interest rates The disparity between the markets’ current interest expectations for official UK interest rates and our forecast that they will fall to 3.5% next year suggests that there are opportunities for both... 6th September 2005 · 1 min read
UK Economics Focus The New Mavericks The last six months or so have seen a significant increase in disagreement amongst members of the Monetary Policy Committee. This trend culminated in the August meeting at which, for the first time... 23rd August 2005 · 1 min read
UK Economics Focus Lower interest rates may not kick-start spending Relief is finally on its way for UK consumers in the form of lower interest rates. But there are a number of reasons why rate cuts might prove less powerful than in the past, meaning that those hoping... 4th August 2005 · 1 min read
UK Economics Focus Lower interest rates may not kick-start spending Relief is finally on its way for UK consumers in the form of lower interest rates. But there are a number of reasons why rate cuts might prove less powerful than in the past, meaning that those hoping... 4th August 2005 · 1 min read
Europe Economics Focus Will the ECB cut rates? The case for a cut in euro-zone interest rates is straightforward: the economic recovery has lost momentum and monetary policy is one of the few remaining levers available to stimulate growth. Indeed... 26th May 2005 · 1 min read
UK Economics Focus MPC may be too sanguine on link between housing & spending The Monetary Policy Committee has soothed concerns over the recent slowdown in the housing market by pointing out that the link between house prices and household spending has loosened markedly in... 14th February 2005 · 1 min read
UK Economics Focus MPC may be too sanguine on link between housing & spending The Monetary Policy Committee has soothed concerns over the recent slowdown in the housing market by pointing out that the link between house prices and household spending has loosened markedly in... 14th February 2005 · 1 min read
UK Economics Focus Average earnings growth no barrier to lower interest rates Average earnings growth has recently started to edge dangerously close to the 4.5% threshold which the Monetary Policy Committee (MPC) has previously stated is the maximum consistent with meeting its... 12th January 2005 · 1 min read
Europe Economics Focus Will the ECB intervene to restrain the euro? The ECB has already started to express concern about the rising euro. This has led to increased speculation about when the ECB might intervene to resist further strengthening. However, we believe that... 10th November 2004 · 1 min read
UK Economics Focus Getting a better measure of market rate expectations The most frequently used method of estimating the markets’ expectations for the official interest rate is to derive an implied path from short sterling futures contracts. On the face of it, these... 17th August 2004 · 1 min read
UK Economics Focus Time to start thinking about lower interest rates? With UK interest rates still firmly in the up-phase of the cycle, markets and commentators alike have continued to focus on exactly how far rates are likely to rise. So far, they appear to have given... 9th August 2004 · 1 min read
