The UK and U.S. economies look similar in almost every respect except one: interest rates. The Bank of England (BoE) has short-term rates at 0.75% while the Federal Reserve (Fed) has them a 2.375% (Figure 1) Otherwise, both have exceptionally low unemployment (Figure 2), reasonably low core inflation (Figure 3) and an extremely flat Phillips curve (the Phillips curve states that inflation and unemployment have an inverse relationship) (Figures 4, 5 and 6), which imply that low unemployment is not generating inflation in either country. Neither nation has deleveraged its non-financial sector since the 2008 crisis ... (full story)