UK Economics Focus No room for mavericks in Mervyn’s Kingdom? The last year or so has seen an unprecedented degree of unity in the voting behaviour of members of the Monetary Policy Committee. Only once in the last 12 months has the size of the majority slipped... 29th July 2004 · 1 min read
UK Economic Outlook Monetary Policy at the Crossroads (Q3 04) The general perception among economists and the markets alike is that the UK’s inflation targeting monetary policy regime is the model that all other countries should follow. But is the current regime... 27th June 2004 · 1 min read
UK Economics Focus Time for monetary shock treatment? The failure of the increases in official UK interest rates seen in recent months to have any visible impact on the housing market or the rapid growth of household spending and borrowing suggests that... 22nd June 2004 · 1 min read
UK Economics Focus MPC’s faith in surveys may prove misplaced The Monetary Policy Committee’s prediction of a very solid 3.5% expansion in GDP this year is based on the assumption that the official output data will soon reflect the buoyancy of the business... 18th May 2004 · 1 min read
UK Economics Focus Neutral interest rates could be lower than you think Predictions from some forecasters that interest rates are set to rise to 5% or above in the current cycle are based at least in part on the assumption that the Monetary Policy Committee will want to... 9th November 2003 · 1 min read
UK Economics Focus The HICP and interest rates (re-visited) Conventional wisdom has had it that the impending switch in the targeted measure of UK inflation from RPIX to the harmonised index of consumer prices (HICP) will have either a neutral or downward... 30th September 2003 · 1 min read
UK Economics Focus Lower pound should not prevent future rate cuts Today’s decision to leave interest rates unchanged presumably reflected a belief amongst MPC members that the drop in the exchange rate will do their job for them. This view is supported by some model... 8th May 2003 · 1 min read
UK Economics Focus MPC unity a sign of weakness? The last year or so has seen an almost unprecedented degree of unity between members of the UK’s Monetary Policy Committee. Not only have interest rates themselves been left on hold for 11 months, but... 6th November 2002 · 1 min read
UK Economics Focus Monetary policy saves the world, but it will be harder next time For the second time in five years, monetary policy has saved the world from what looked like certain recession. If this signals that monetary policy has become more effective in smoothing the path of... 23rd July 2002 · 1 min read
UK Economics Focus Interest rate expectations too pessimistic again Markets have begun the new year with their traditional pessimism towards interest rates. Having dropped to levels perceived to be “abnormally low” last year, rates are now expected to move quickly... 9th January 2002 · 1 min read
UK Economics Focus More Cuts to Come Today’s 25bps cut in interest rates is not unexpected as it completes unfinished business from the previous inter-meeting cut. This is the second shoe to drop. 4th October 2001 · 1 min read
UK Economics Focus Half-hearted, but welcome Today’s 25bp cut in interest rates from the Bank of England looks a bit like a compromise between those MPC members anxious to participate in the global loosening of policy kicked off by the Fed... 18th September 2001 · 1 min read
UK Economics Focus Fed leads the way for others to follow Today’s intra-meeting cut in US interest rates illustrates the Fed’s determination to do everything it can to help financial markets in the wake of last week’s events. Although the stock market might... 17th September 2001 · 1 min read
UK Economics Focus Inflation & Interest Rates – Sticking to our Guns A succession of stronger economic data releases, coupled with speculation of early entry into the single currency, has prompted a dramatic shift in the markets’ expectations of the future path of... 13th June 2001 · 1 min read
UK Economics Focus Forecast change: 4.5% interest rates by year-end Clients of Capital Economics will know that we have been well ahead of consensus forecasts in predicting lower official interest rates in the UK this year. We first forecast that the Bank of England’s... 10th May 2001 · 1 min read
UK Economics Focus Another 1% to Come Today’s ¼ point cut in base rates is proof that, for all the indications that the fundamentals of the UK economy remain in good shape, the MPC is fully aware of the potential impact that a rapid... 5th April 2001 · 1 min read
