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BOE: Pill Q&A Begins, But Leads With Little on Current MonPol

BOE

Pill Q&A continues:

  • We expect negative contribution of energy to drop out in near future, meaning threat of inflation to higher across the second half of this year
  • There is little the MPC can do about that. What we have to do is focus on the 18-month / 2-year horizon and look through "noise" of Month-to-month inflation.
  • On labour market - We face two challenges - first is behaviour of UK labour market, has been distinctive in that UK has seen slower recovery of participation post-COVID relative to comparable countries. This means less supply potential and speed limit of economy is lower. Second is problems with quality and provision of UK labour market data - particularly low response rates on participation surveys.

Q&A shifts to audience from moderator having talked at length on Bernanke review policies.

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Pill Q&A continues:

  • We expect negative contribution of energy to drop out in near future, meaning threat of inflation to higher across the second half of this year
  • There is little the MPC can do about that. What we have to do is focus on the 18-month / 2-year horizon and look through "noise" of Month-to-month inflation.
  • On labour market - We face two challenges - first is behaviour of UK labour market, has been distinctive in that UK has seen slower recovery of participation post-COVID relative to comparable countries. This means less supply potential and speed limit of economy is lower. Second is problems with quality and provision of UK labour market data - particularly low response rates on participation surveys.

Q&A shifts to audience from moderator having talked at length on Bernanke review policies.

Keep reading...Show less