Chancellor pushing at the limits on base rates

Article Abstract:

The UK government's monetary policy seems to have the dual aim of low inflation and output stabilisation. Against this background, the level of base interest rates which the government selects is critical. The government uses the output gap as one of the measures by which it determines interest rates, but this is a very difficult measure to assess accurately. The UK is facing a long-term output gap, and this will probably prove difficult to close.

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Monetary rules say base rates should not be cut

Article Abstract:

The Bank of England is strongly opposed to further cuts in interest rates, and this view is shared by a considerable number of economists. However, it is quite possible that the chancellor will insist that interest rates should be reduced once more, and this again will draw attention to the issue of whether monetary policy is being placed in severe danger for the sake of short-term political advantage in the run-up to the next general election.

Forecasts and trends, Interest rates

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Smoking guns may trigger US reversal

Article Abstract:

The US Federal Reserve is shifting towards monetary policy tightening. This trend is likely to form the basis for a significant turning point in global monetary policy. The main issue will be the extent of monetary policy tightening and its impact on US economic expansion. The Federal Reserve would be forced to tighten policy significantly if there were a sharp rise in domestic inflation expectations in the US or if the dollar were to collapse.

United States, Market information - general, Administration of General Economic Programs, Currency Stabilization Programs, United States economic conditions, Currency stabilization

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