Bank of England leaves monetary policy unchanged

A_Medium_Size_Jock

Wild_Rover wrote: »

UK CPI inflation now 2.3% year on year.

Discuss?

WR

Discuss what exactly?
That last month Eurozone inflation was the same as ours; 1.8% UK vs 1.8% Eurozone.
Let's see what figure the Eurozone post for February.
Ah yes, 2% - also increased although admittedly not quite as much.
Although the Eurozone's forecast for March so far is 2.2% - not wildly dissimilar.

Also I see that this is the highest since September 2013 ........... what made inflation "high" then; it wasn't Brexit.

Then there's the BOE whose target rate of inflation is 2%.
This is not exactly perilously wide of the mark.

Things may well change and inflation may well increase further.
But at this moment, taking the above into consideration there is nothing of note to say really.

For a little balance see:
https://www.ft.com/content/fa55fbe4-2a58-3f28-b9f6-a636fc336c6c
Not new but nonetheless relevant.

davomcdave

A_Medium_Size_Jock wrote: »

Discuss what exactly?
That last month Eurozone inflation was the same as ours; 1.8% UK vs 1.8% Eurozone.
Let's see what figure the Eurozone post for February.
Ah yes, 2% - also increased although admittedly not quite as much.
Although the Eurozone's forecast for March so far is 2.2% - not wildly dissimilar.

Also I see that this is the highest since September 2013 ........... what made inflation "high" then; it wasn't Brexit.

Then there's the BOE whose target rate of inflation is 2%.
This is not exactly perilously wide of the mark.

Things may well change and inflation may well increase further.
But at this moment, taking the above into consideration there is nothing of note to say really.

For a little balance see:
https://www.ft.com/content/fa55fbe4-2a58-3f28-b9f6-a636fc336c6c
Not new but nonetheless relevant.

Inflation will, in my opinion, continue to rise for 10-12 months due to the fall in the pound that happened on the day after the Brexit vote. That might lead to more inflation or not depending on whether employees can get pay rises as a result of the increased inflation.

I keep saying this. Last month I was wrong because inflation was a bit below the Eurozone. Now it's a good way above but I'm wrong because inflation also rose in the Eurozone. Let's see why I'm wrong next month despite my prediction being accurate. I enjoy the, "Why Davo is wrong despite his prediction being right" game. It's a lot of fun although maybe not as good as that Bruce Forsyth one with the woman in the short dress. Or Risk, everyone loves Risk.

StevieJ

davomcdave wrote: »

Or Risk, everyone loves Risk.

I think I preferred it when the Govt and the Public were risk adverse and it was me taking the investment risks. Now we are all doing it, it has become very complicated :-)

A_Medium_Size_Jock

davomcdave wrote: »

Inflation will, in my opinion, continue to rise for 10-12 months due to the fall in the pound that happened on the day after the Brexit vote. That might lead to more inflation or not depending on whether employees can get pay rises as a result of the increased inflation.

I keep saying this. Last month I was wrong because inflation was a bit below the Eurozone. Now it's a good way above but I'm wrong because inflation also rose in the Eurozone. Let's see why I'm wrong next month despite my prediction being accurate. I enjoy the, "Why Davo is wrong despite his prediction being right" game. It's a lot of fun although maybe not as good as that Bruce Forsyth one with the woman in the short dress. Or Risk, everyone loves Risk.

"A good way above"?
A full point or more may be so described but these tiny fractions of a percent are certainly not "a good way above".

You really are desperately trying to justify your predictions as correct but - as of this moment in time - nope, sorry; look below.
It may be a close call but if I were you I should stick to your day job rather than reminiscing about Bruce Forsyth.

Also I note that no-one has mentioned how increased energy prices here in the UK have pushed inflation up, when it is mentioned as a factor in the Eurozone.
Why is that?
Or are we expected to ignore the fact that our "big six" have increased prices by an average of around 7% for both fuels?

Again, I will not deny that inflation may well increase over the course of this year.
Even if it reaches the predicted 2.7% to 2.9% peak this year however, that is not the end of life as we know it.

[Deleted User]

A_Medium_Size_Jock wrote: »

Discuss what exactly?
That last month Eurozone inflation was the same as ours; 1.8% UK vs 1.8% Eurozone.
Let's see what figure the Eurozone post for February.
Ah yes, 2% - also increased although admittedly not quite as much.
Although the Eurozone's forecast for March so far is 2.2% - not wildly dissimilar.

Also I see that this is the highest since September 2013 ........... what made inflation "high" then; it wasn't Brexit.

Then there's the BOE whose target rate of inflation is 2%.
This is not exactly perilously wide of the mark.

Things may well change and inflation may well increase further.
But at this moment, taking the above into consideration there is nothing of note to say really.

For a little balance see:
https://www.ft.com/content/fa55fbe4-2a58-3f28-b9f6-a636fc336c6c
Not new but nonetheless relevant.

Given the detail in your reply, you seem to have worked it out!

WR

davomcdave

A_Medium_Size_Jock wrote: »

"A good way above"?
A full point or more may be so described but these tiny fractions of a percent are certainly not "a good way above".

You really are desperately trying to justify your predictions as correct but - as of this moment in time - nope, sorry; look below.
It may be a close call but if I were you I should stick to your day job rather than reminiscing about Bruce Forsyth.

Also I note that no-one has mentioned how increased energy prices here in the UK have pushed inflation up, when it is mentioned as a factor in the Eurozone.
Why is that?
Or are we expected to ignore the fact that our "big six" have increased prices by an average of around 7% for both fuels?

Again, I will not deny that inflation may well increase over the course of this year.
Even if it reaches the predicted 2.7% to 2.9% peak this year however, that is not the end of life as we know it.

By 'a good way above' I mean 'a statistically significant amount higher'.

I thought the Bruce Forsyth thing might appeal to all the rich boomers on here. I will stick to Z-Cars analogies in future.

I don't recall mentioning the end of life as we know it. Perhaps you're confusing me with Toastie..?

My guess is that inflation will hit something more like 4% and then the secondary effects may, or may not, kick in. We'll see what happens next.

michaels

davomcdave wrote: »

...Last month I was wrong because inflation was a bit below the Eurozone. Now it's a good way above....

I think the data to date suggests EU zone inflation has not increased any slower since the BREXIT vote than UK inflation.

And as for it triggering BoE action - perhaps look at this graph


and remind me how many times the BoE raised interest rates when CPI went from 1% in 2009 to over 5% in 2011..round numbers are fine

Thrugelmir

michaels wrote: »

and remind me how many times the BoE raised interest rates when CPI went from 1% in 2009 to over 5% in 2011..round numbers are fine

BOE only saw the rise in inflation as temporary. When the medium term view changes so will monetary policy.

michaels

Thrugelmir wrote: »

BOE only saw the rise in inflation as temporary. When the medium term view changes so will monetary policy.

An increase inflation due to a fall in the currency is also temporary unless wages start to increase to compensate.

A_Medium_Size_Jock

German inflation in February 2.2%.
https://www.ft.com/content/d916f05e-fe89-11e6-8d8e-a5e3738f9ae4

Well there you go; I didn't know Germany's Euro had lost value or that Germany was exiting the EU.
Excuses for the similarity and explanation for there being so little difference between German and UK inflation are invited now; I wait with interest.

Also here to avoid paywall:
http://www.euronews.com/2017/03/01/germany-inflation-rises-unemployment-falls