Daily Archives: May 6, 2011

Yesterday’s decision to keep monetary policy on hold in the UK was such a foregone conclusion that it barely made ripples. But predictability does not mean the Bank and economists are equally calm beneath the surface. Rather, they are furiously paddling to try to work out what on earth is going on with the British economy.

Here, I will try and present a pretty neutral post on the current outlook, against which to judge next week’s Bank of England Inflation Report.

Why was the rate decision so predictable?
Compared with April, the latest data showed a small and possibly temporary drop in inflation, weak first quarter growth figures and no let-up in uncertainty.

In these circumstances, any converts to tighter monetary policy would find it tricky, to say the least, to justify their new hawk status. Read more

Ralph Atkins

It is a brave luncheon speaker who chooses Finnish monetary policy between the first and second world wars as his subject. But Mervyn King, Bank of England governor, just pulled it off at a conference in Helsinki, marking the 200th anniversary of the country’s central bank. (Read the speech here.)

King may have selected his off-beat subject to avoid generating unwanted headlines – there was a strong media presence following the European Central Bank’s meeting here on Thursday. But it was also a subject close to his heart – and is more compelling than you might thing. Read more