United Kingdom Central Bank Internal Monetary Policy Appear Differences
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As a relatively independent monetary system, the United Kingdom by the second round of quantitative easing Federal Reserve monetary policy is not obvious. At present, by the domestic economic situation and the impact of fiscal policy, the Bank of England monetary policy decision-making problem facing the U.S. at this time introduced the quantitative easing policy will undoubtedly increase the complexity of the Bank of England decision.
Bank of England monetary policy divergence within the
Starting from June this year, England's views on monetary policy within the start from the previous "fully consistent" to differences. 9 members in the decision-making committee will have one member suggested that there should raise interest rates to curb inflationary pressures. Since then, the member per month to keep interest rates steady on the decision to vote "against."
To 10 months, differences of opinion within the Bank of England further "deterioration." Members have raised with a "tit for tat," the view that monetary policy should be expanded to stimulate efforts to increase the "quantitative easing" policy, money supply directly, that the United States and Japan to "synchronize" the monetary policy. Thus, in the future how to implement economic control, the Bank of England within the emergence of the "three voices", and continues today.
The economic situation and prospects in dispute
Reflect the divergence of views within the Bank of England different views on the current economic situation and economic trends for the coming period the different judgments. Overall, three reasons why the Bank of England and even the British business community's views on the economic outlook appears divided.
One is the recovery trend of the British economy is still stable. The British Government last month released the latest data show that the economy in the third quarter of the previous quarter by 0.8%, although lower than the 1.2% increase in the second quarter, but significantly higher than the 0.3% in the first quarter. This shows that the UK economy was speeding up the recovery rate is trend, but the pace of recovery is very unstable.
Second, the impact of massive government deficit reduction is difficult to determine. Britain's new coalition government since he took office in May, the implementation of drastic cuts in government spending in an attempt to balance the budget within 5 years, while large-scale "out" before the Labor government introduced economic stimulus measures. This ambitious program and the "exit" policy, in the initial stage of recovery and the UK economy gets tough, it is a boon or a danger? Many economic analysts have expressed concern.
Third, the UK inflation outlook uncertain. Although the Bank of England November 10 quarterly inflation report that UK inflation will continue to rise in the near future, the Bank of England next year will remain above 2% of control objectives to determine, but thereafter will continue to decline. This optimistic forecast can be achieved, many people doubt it.
United Kingdom United States decision to increase the difficulty of quantitative easing
November 17, the Bank of England published in November meeting of monetary policy decision-making, specifically to improve the second time the United States the adverse effects of quantitative easing, that this policy may result in the international capital market, the U.S. long-term government bond yields the rate of increase, indicating that investors continue to expand the U.S. money supply concerns.
In addition, the U.S. policy of quantitative easing prices led to the recent strength against the dollar the United Kingdom, will also have an important pillar of the UK economy adversely affected the export of goods.
Within the Bank of England inflation outlook for economic recovery and the emerging differences, the Federal Reserve's monetary policy re-launched the self-interest will undoubtedly increase the Bank of England decision-making difficult. Although widely predicted that the recent UK interest rates will remain stable, and a substantial increase next year, you will not be possible, but in 2011 the Bank of England monetary policy decisions will face a dilemma. |
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Author Resource:-
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By :
Jessie Stone
Submitted
2010-12-13 11:15:45 |
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