By Jonathan Wheatley, Brazil Correspondent
© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Inflation has fallen less than central bankers’ models would expect, Spencer Dale has said. The Bank of England’s chief economist said inflation dynamics were not well understood in economies where inflation expectations were centred around a central bank target.
“The experience of many countries thus far is that inflation appears to be more resilient than our models would suggest. Inflation responds less to measures of slack,” Mr Dale told the annual conference of the Royal Economic Society.
The European Central Bank made its final offer of unlimited funds over six months as policymakers continue to withdraw the measures put in place to fight the financial crisis.
The ECB called for bids today in a tender where the rate paid will be indexed to the average of the ECB’s main rate over the life of the loans. It will announce the results tomorrow at around 11:15 am.
As far as the economy and the election is concerned, I have been struck for some time by the similarities with the 1992 election. After finding some contemporary analysis of the 1992 election, on which I worked as a cub researcher, my memory has been playing tricks on me. There are even more similarities than I remembered:
Its leaders have just been announced by the new joint monetary council, in what will probably be seen as the inaugural meeting of the new joint central bank. Jurisdiction will cover Saudi Arabia, Qatar, Kuwait and Bahrain. Reuters reports the bank chairman as Saudi central bank chief, Dr Muhammad Al-Jasser. His deputy will be Bahrain’s central bank chief Mr Qassim Mohammed Fakhro.
With leaders chosen, meetings underway and an ultimate head office location of Riyadh (see map), what more is required? “There are certain legislative and financial measures that have not been completed” for the monetary union, Kuwait central bank governor Sheikh Salem Abdulaziz Al-Sabah told a news conference. Today’s meeting is expected to approve plans and a timeframe for the new institution.
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