UK | Brighter outlook raises risks of an earlier rate lift-off
At May’s MPC meeting the committee revised up its forecast for GDP growth in 2021 significantly and laid out its plans to slow the pace of asset purchases. Andrew Haldane broke ranks by voting to cut the target for QE.
A tapering of QE had already been floated by the MPC, so we don’t attach much significance to the decision. But with the economy seen to be running hotter, and unemployment peaking lower, than previously expected, the risk that monetary policy will be tightened earlier than we anticipated has increased.
What you will learn:
- The BoE now expects GDP to regain pre-Covid levels by the end of this year
- Inflation is expected to rise above the 2% target, but only temporarily
- Andrew Haldane underlined some of his recent public warnings by voting to cut back on QE
Tags:
Related Services
Post
What AI means for economies, businesses, jobs & cities
Artificial Intelligence has the potential to fix the world's productivity problems, just as previous general purpose technologies such as steam power, electricity, and computers have, in our view.
Find Out More
Post
Australia: Flight to quality occurring but secondary markets may not be doomed
We believe the most significant policy measures to come through in the budget for residential building are the announced tax tweaks for build-to-rent (BTR) development.
Find Out More