The Bank of England's poisoned chalice

Article Abstract:

The Bank of England has to decide on United Kingdom interest rates and it is not clear whether they should be raised. Retail sales have increased, but their rate of increase is slowing. Borrowing and investment have fallen. There could be some distortion if figures from the Confederation of British Industry are relied on because they tend to focus on manufacturing companies which have been hit by the rise in value of pound sterling. Pay settlements do not appear to be creating inflationary pressure. The evidence is contradictory, though the risk of a rate risk may be less than keeping rates stable.

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Expect a rate rise from the bank

Article Abstract:

United Kingdom interest rates are likely to be raised by the Monetary Policy Committee in Nov 1999. Gross domestic product grew by 0.9% in real terms in 4th qtr 1999, while wage inflation stood at 5.2% for the year to Aug 1999, a level seen as likely to give rise to inflationary pressures. Supply side improvements could keep inflation low, but there is a debate as to how far a strong pound sterling can depress inflation. Interest rates may be raised as a precautionary measure.

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Taylor rule's accuracy called into question

Article Abstract:

British interest rate policy is assessed, and the usefulness of the Taylor rule is questioned.

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