Why the Monetary Policy Committee must learn the importance of being boring

Article Abstract:

Conflict over the allocation of the Bank of England's limited resources for monetary analysis has damaged public perceptions of the technical competence of the Monetary Policy Committee (MPC). It is clear that it is important to keep the power of monetary policy in perspective. It is important that the MPC is broadly right, but setting interest rates at slightly the wrong level does not really matter. The MPC should probably raise interest rates again. However, such a decision will be made more controversial by the fact that there has been conflict between MPC members.

United Kingdom, Management, Column, Monetary policy

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Rapid rise in earnings rocks financial markets

Article Abstract:

There has been a sharp fall in unemployment in the UK, with the headline unemployment claimant count falling by 68,200 to 1.74 million in Feb 1997. This is the first time that unemployment has fallen below 1.75 million since 1991, and a further fall is expected by the end of 1997. High street sales have also been stronger than expected, with the volume of retail sales up by 0.5% in Feb 1997. Financial markets are growing increasingly concerned about rising wage pressures, and some observers feel that interest rates will rise shortly.

Economic aspects, Statistics, Unemployment

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Slowdown paves way for rate cut

Article Abstract:

Economists now believe that UK chancellor Kenneth Clarke is planning to make a further reduction in base rates in early 1996. He is known to be particularly concerned about pay pressures, seeing trends in the labour market as a key element in future developments in inflation. Another cut in base rates could also take place in mid-1996.

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