dell'inflation The publication of the quarterly report and the following Bank of England Governor Mervyn King's press conference appointments are key to understanding the prospects of monetary policy in the United Kingdom during the months. For this reason, the market awaits the publication of the report provided yesterday with great trepidation, particularly after the minutes of the meeting of last October had shown as the BoE was divided into three factions (the situation which should be confirmed by the minutes of the November meeting which will be published on Wednesday 17): the majority of the Monetary Policy Committee who voted to keep rates unchanged at 0.5% and is the program GBP200bn to quantitative easing, a member, Andrew Sentance, who would have preferred to raise rates by 25 basis points and another member, Adam Posen, who had voted to increase the program's quantitative easing GBP50bn.
The answer that the markets seem to have drawn from the events of the past is clear: an increase in the program of quantitative easing by the BoE is not imminent despite the Fed has decided to expand its monetary stimulus in early November. Not else can you explain the simultaneous rise of sterling and long-term rates during the press conference following the King.
to remove the possibility of further monetary stimulus in the short was the revision in the projected consumer price index over the coming months by the Bank of England. These, in fact, have been revised upwards since last August, with inflation expected to remain well above the target of 2% until the end of 2011. Only after inflation should fall below 2% because of spare capacity in the system. The scenario of inflation appears, however, very uncertain that the same Central Bank. As many of the factors that should support the inflation in the coming months are temporary (VAT rise, energy prices and the weakness of the pound), they may raise expectations on consumer price in the medium term, making 'stronger than expected inflation by the monetary authorities in Britain.
Moreover, with inflation expectations well above the target level of 2% and a growth rate that is estimated to remain robust over the coming quarters, an increase of expansionary monetary policy da parte della BoE sembrerebbe difficilmente giustificabile adesso. Le nuove proiezioni della Bank of England, infatti, vedono la crescita continuare ad un ritmo medio del 3% annuo per tutto il periodo di previsione. L’effetto negativo dovuto alla politica fiscale restrittiva che sarà adottata a partire dal 2011 sembra, quindi, essere considerato limitato, contrariamente a quanto detto dal Fondo monetario internazionale il giorno prima.
Per questo motivo la Bank of England dovrebbe confermare un atteggiamento attendista almeno sino alla pubblicazione del prossimo inflation report, prevista nel mese di febbraio, considerando che anche un incremento dei tassi a causa delle pressioni inflazionistiche elevate appare improbabile per all the uncertainties about the economic outlook. Only then, based on the trend of economic data will be published in the coming weeks, the British monetary authorities could give a clearer direction to its orientation. King himself, in fact, confirmed that the analysis of individual data that will be in the coming weeks will be very important to understand which will address the monetary policy.
However, rather than individual economic data may be the trend of the Pound to determine the course of monetary policy over the coming quarters. At the press conference, in fact, King showed that a balance in the external balance through increased exports and more moderate growth in consumption is essential to attend a more balanced growth in the years to come. At the same time, King has also highlighted a slowdown in other major international economies is the greatest risk to the outlook for UK growth. In this scenario, and the decline in sterling in recent years had a lower than expected effect on export performance, each increment of the currency would be regarded with concern by the Bank of England.
Well, that King was the first to advocate a reduction of the currency to improve economic growth, has not changed his mind: to bet on a rise in sterling in the coming months could thus be very risky.
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