Archive

February 20, 2024
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2% is Neither Necessary Nor Sufficient

  • UK CPI inflation is slowing, but low 6-month and 3m-o-3m growth rates don’t provide any helpful signal at the 2yr horizon. Relevant measures remain above the 2% target.
  • Falling energy prices are depressing spot inflation closer to target this summer. Without sustainable reasons, proximity to 2% is not a sufficient condition for rate cuts.
  • The BoE could clarify its reaction function with threshold guidance of what would be necessary to consider cuts. It probably won’t do this, despite the benefits.

By Philip Rush

February 19, 2024
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UK Politics: The Right Bites

  • Following Reform UK’s strong performance in last week’s by-elections, the 29 February Rochdale by-election will create pressure for Rishi Sunak from within his party to shift rightwards or step down.

By Alastair Newton

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