{"id":2582,"date":"2008-05-06T08:51:30","date_gmt":"2008-05-06T08:51:30","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2582"},"modified":"2025-03-27T15:48:38","modified_gmt":"2025-03-27T15:48:38","slug":"inflation-risks-too-great-for-mpc-rate-cut-this-week","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2582","title":{"rendered":"Inflation risks too great for MPC rate cut this week"},"content":{"rendered":"<p>This week&#8217;s MPC rate decision is a particularly difficult call. Activity indicators are at levels historically consistent with a quarter- or even half-point Bank rate cut. The near-term inflation outlook remains troubling, however, with the May <em>Inflation Report<\/em> likely to show a larger and more prolonged overshoot than projected in February. (Commentators often seem to forget that the Committee&rsquo;s <a href=\"http:\/\/www.bankofengland.co.uk\/monetarypolicy\/pdf\/chancellorletter080311.pdf\" target=\"_blank\">remit<\/a> is to achieve 2% inflation &ldquo;at all times&rdquo;.) Meanwhile, financial markets have calmed significantly and MPC members hope the new Special Liquidity Scheme will contribute to further improvement. <\/p>\n<p>Weighing up these factors, my MPC-ometer suggests a 6-3 vote for unchanged rates this week. A cut is certainly possible but would be dangerous given <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2008\/5\/1\/uk-inflation-at-risk-of-extended-overshoot-continued.html\">current inflationary risks<\/a>. For comparison, the model forecast is close to the 5-4 vote for no change by the <a href=\"http:\/\/www.economicsuk.com\/blog\/000700.html#more\" target=\"_blank\"><em>Sunday Times<\/em> Shadow MPC<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This week&#8217;s MPC rate decision is a particularly difficult call. Activity indicators are at levels historically consistent with a quarter- or even half-point Bank rate cut. The near-term inflation outlook remains troubling, however, with the May Inflation Report likely to show a larger and more prolonged overshoot than projected in February. (Commentators often seem to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2582","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2582","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2582"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2582\/revisions"}],"predecessor-version":[{"id":4891,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2582\/revisions\/4891"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2582"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2582"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2582"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}