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The UK economic outlook and monetary policy - speech by Michael Saunders
Let’s start with the background for the recent increases in Bank Rate in December and February. Before the pandemic, in late 2019, the economy was in reasonable balance. Unemployment was just below 4% (the lowest for decades), underlying pay growth was 3-3½% YoY, and CPI inflation was close to our 2% target. Economic activity was restrained by Brexit uncertainties, given that the UK’s trading relations with the EU had not been agreed. Against this backdrop, our policy rate, Bank Rate, was at 0.75%, having risen a little in 2017 and 2018. Estimates of the neutral rate are inherently uncertain, but that 0.75% ... (full story)
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BOE'S SAUNDERS SAYS QUICKER TIGHTENING EARLY ON COULD HELP LIMIT THE OVERALL TIGHTENING CYCLE #News #Forex #BOE #SAUNDERS
— Capital Hungry (@Capital_Hungry) March 1, 2022
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BoE's Saunders Says Vote For 50Bps Rate Hike Doesn't Mean He Would Back It Again
— LiveSquawk (@LiveSquawk) March 1, 2022
- Risks On Stronger, More Persistent Inflation
- Could See CPI Stay Above 2% Target Without Action
- Significant Excess Demand In UK Economy
- Inflation Expectations ‘Not Well Anchored’
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BoE's Saunders:
— DailyFX Team Live (@DailyFXTeam) March 1, 2022
- The energy effect on inflation is likely to be transitory
- Running the economy hot would simply result in an even more persistent inflation overshoot