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Ramsden Sees Cashflow Effect Slowing, Not Blunting, Transmission

BOE

Q: Transmission mechanism blunted due to mortgage market. Is there a question about monpol being blunted by this?

  • A: Wouldn't use the word blunted. Have to adapt use of monpol to take this into account.
  • Ramsden: Cash-flow effect has slowed rather than blunted monpol. We've known this for some time and factored into forecasts. Don't think overall transmission mechanism has changed all that much. Shows we go from a position of excess demand to an opening up of spare capacity. Do expect a rise in unemployment (albeit less than before).

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