The Bank of England has many tools at its disposal… but it’s not clear that it should use them yet
by Jeremy Warner
It’s “super Thursday” next week, a confluence of four separate announcements from the Bank of England including a likely cut in interest rates, publication of the minutes of the Monetary Policy Committee’s deliberations, the quarterly Inflation Report, with forecasts updated to take account of the Brexit vote, and a letter from the Governor of the Bank of England to the Chancellor explaining why the inflation rate is still undershooting the target.
Yet amidst this smorgasbord of actions and disclosures, there is only one that really matters, and that’s the scale of the now almost certain monetary easing.
Last week’s faintly alarming purchasing managers survey seems to have convinced waverers on the Monetary Policy Committee, including the hawkish Martin Weale, that action is indeed required, even if the survey’s findings may give a somewhat misleading impression of what’s really going on in the economy.