The Bank that likes to say it might be wrong

Article Abstract:

The Bank of England's most recent Inflation Report acknowledges that there could be a recession in 1999. The Bank assesses the possibility of a recession at only 25%, thus making itself more credible than the Treasury, which has not really acknowledged the danger of recession at all. The Bank was unwilling to take the unpopular step of raising interest rates, and has therefore gained some leeway to reduce them again if necessary. Indeed, it is likely that the Bank will cut interest rates aggressively if there is a threat of recession, but the European Central Bank will not adopt the same approach.

Interest Rates, Economic aspects, Recessions

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Economic management is not a party political issue. True or false?

Article Abstract:

Some observers believe that the UK will see higher taxes and interest rates whether the Labour party or the Conservative party wins the forthcoming general election. It is certainly true that interest rates will rise, but taxes will only have to rise if public spending does not remain within present targets or the current tax levels do not narrow down the Public Sector Borrowing Requirement quickly enough. The UK may be able to sustain a lower rate of unemployment than in the past, thus boosting the economy's capacity and cutting pressure on public spending.

Tax policy

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Higher rates needn't scare investors

Article Abstract:

World financial markets will be judged in 1997 by the extent to which they are able to look beyond rising interest rates and see a longer-term downward trend. Bonds and currencies will experience considerable difficulties in 1997 if financial markets are unsettled by rising interest rates. It will be particularly interesting to analyse developments on UK financial markets, as interest rate rises will be introduced in the UK first.

Financial markets, 1997 AD

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