Wednesday, April 25, 2007
Bank of England envisages 'sharp' inflation drop
Ever wondered about Sam’s nocturnal activities? The topics of today’s Blog are covered in LiveEcon:
Chapters 6 and 11 on monetary policy.
Chapters 7 and 15 on inflation.
Governor Mervyn King said that there could be a "sharp" decline in the UK's rate of inflation over the next four to six months. Interest rates were left unchanged at 5.25% earlier this month. Many analysts are predicting that interest rates will increase in May after house price growth has continued. UK house prices had risen because of low interest rates and limited supply. However, lower energy costs and higher borrowing costs probably would led to slower price growth in coming months.
Read the full story at: http://news.bbc.co.uk/2/hi/business/6587253.stm
Inflation has recently surged to over 3%, substantially in excess of the 2% target. In deciding whether or not to raise interest rates to slow price growth, the Bank exercised caution last month, and left interest rates unchanged. To some extent rises in energy prices and house prices have contributed to the high levels of inflation, but energy prices have now started to fall and as cuts feed through to the consumer, the pressure on prices should ease.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. For example, Chapters 6 and 11 look in some depth at monetary policy, and chapters 7 and 15 look at the causes and consequences of inflation. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
Ever wondered about Sam’s nocturnal activities? The topics of today’s Blog are covered in LiveEcon:
Chapters 6 and 11 on monetary policy.
Chapters 7 and 15 on inflation.
Governor Mervyn King said that there could be a "sharp" decline in the UK's rate of inflation over the next four to six months. Interest rates were left unchanged at 5.25% earlier this month. Many analysts are predicting that interest rates will increase in May after house price growth has continued. UK house prices had risen because of low interest rates and limited supply. However, lower energy costs and higher borrowing costs probably would led to slower price growth in coming months.
Read the full story at: http://news.bbc.co.uk/2/hi/business/6587253.stm
Inflation has recently surged to over 3%, substantially in excess of the 2% target. In deciding whether or not to raise interest rates to slow price growth, the Bank exercised caution last month, and left interest rates unchanged. To some extent rises in energy prices and house prices have contributed to the high levels of inflation, but energy prices have now started to fall and as cuts feed through to the consumer, the pressure on prices should ease.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. For example, Chapters 6 and 11 look in some depth at monetary policy, and chapters 7 and 15 look at the causes and consequences of inflation. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
# posted by Sam @ 18:32 
