Daily Archives: August 2, 2012

James Mackintosh

So the Federal Reserve did almost nothing, and the Bank of England did nothing. All now rests on the European Central Bank for hopes of monetary policy action this week.

The Fed is forgiveable. The Bank, less so: Britain is suffering in a double-dip recession worse than the eurozone (although the eurozone looks set to catch up soon).

Consider this chart: it shows the UK and US inflation expected by bond markets for the five years starting in five years’ time (the 5 year 5 year breakeven, as it is known, derived from bond futures).

UK and US five year five year breakeven inflation (Source: Bloomberg)