MPC dove predicts rapid inflation fall
Inflation will fall to the two per cent target by the summer, monetary policy committee (MPC) member David Blanchflower believes.In a speech last night at the University of Stirling, the MPC's leading dove indicated his continued commitment to fighting the next rate hike, widely expected to take place during the next quarter.The Bank of England's MPC has voted to raise interest rates three times in the past six months amid fears of escalating inflationary pressures.But on each of these occasions â€" in August, November and January â€" Mr Blanchflower has opposed such a rise.Last night he argued that the UK's future economic growth had greater potential than the Bank believed."My own particular view is that there is a slightly greater margin of spare resources in the economy than embodied in the central projection, reflecting both greater spare capacity within businesses, and a greater degree of slack in the labour market," he said.Continued non-inflationary growth would help prevent any offset against downward inflation caused by falling energy bills during most of this year, he suggested.Ongoing uncertainty relating to the impact of a strong pound and the wider international situation would affect how soon inflation would reach chancellor Gordon Brown's two per cent target, however.Having risen from 2.4 per cent in October last year to three per cent in December, consumer price index (CPI) inflation fell back to 2.7 per cent in January.The Bank's quarterly inflation report, published earlier this month, predicted that CPI inflation would settle back around the two per cent mark in the medium term.
Share this..
Related stories
FSA warns banks about remuneration packages
Just 24 hours after the potential £9.6 million remuneration package for Royal bank of Scotland chief executive Stephen Hester was announced, the Financial Services Authority (FSA) has warned banks not to slip into the "business as usual" mode. Without specifically mentioning the Stephen Hester situation it would appear that a number of UK banks have moved into the staff recruitment sector in a ve...
Read MoreBegbies Traynor Sees Insolvencies On The Up
While the corporate insolvency experts Begbies Traynor may have reported a fall in 2007/2008 profits to £5.7 million it seems that the worse the economy gets in the UK, the better the environment for their services. Even though the fall from a £8.5 million profit last year to £5.7 million this year was disappointing, the company did comment that this had been one of the quietest periods in the...
Read MoreCould problems in the Eurozone hamper the UK economic recovery?
While officially the UK economy moved out of recession in the final quarter of 2009 there are concerns as to whether the 0.1% increase in economic activity will be downgraded in the short term. On the back of this we now have significant issues within the Eurozone with the Greek economic collapse set to spread to areas such as Spain, Portugal and possibly elsewhere. There is growing concern that w...
Read MoreIs bankruptcy an option?
As experts believe we will see a steady increase in the number of personal and business bankruptcies over the next 18 months, the stigma which has been attached to bankruptcy for many years would appear to be lifting. That is not to say that bankruptcy is the easy option, because there are major drawbacks, but for some people in dire financial straits maybe bankruptcy is the best option? If you...
Read MoreIs the worst to come for the UK high street?
The announcement of record losses by UK property giant British Land has prompted many analysts to revisit their forecasts for the UK retail sector over the coming weeks and months. There had been a general consensus forming regarding a potential recovery in the short to medium term but these figures, and accompanying statement, appear to have dashed any hopes of a short-term bounce. While British...
Read More