A Dovish Rate Hike
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Bank of England Inflation Report November 2018
Inflation Report November 2018 Inflation Report November 2018 In order to maintain price stability, the Government has set the Bank’s Monetary Policy Committee (MPC) a target for the annual inflation rate of the Consumer Prices Index of 2%. Subject to that, the MPC is also required to support the Government’s economic policy, including its objectives for growth and employment. The Inflation Report is produced quarterly by Bank staff under the guidance of the members of the Monetary Policy Committee. It serves two purposes. First, its preparation provides a comprehensive and forward-looking framework for discussion among MPC members as an aid to our decision-making. Second, its publication allows us to share our thinking and explain the reasons for our decisions to those whom they affect. Although not every member will agree with every assumption on which our projections are based, the fan charts represent the MPC’s best collective judgement about the most likely paths for inflation, output and unemployment, as well as the uncertainties surrounding those central projections. This Report has been prepared and published by the Bank of England in accordance with section 18 of the Bank of England Act 1998. The Monetary Policy Committee: Mark Carney, Governor Ben Broadbent, Deputy Governor responsible for monetary policy Jon Cunliffe, Deputy Governor responsible for financial stability Dave Ramsden, Deputy Governor responsible for markets and banking Andrew Haldane Jonathan Haskel Michael Saunders Silvana Tenreyro Gertjan Vlieghe PowerPoint™ -
Speech by Andy Haldane at the Bank of Estonia, Tallinn, on Wednesday
Folk Wisdom Speech given by Andrew G Haldane Chief Economist Bank of England 100th Anniversary of the Bank of Estonia Tallinn, Estonia 19 September 2018 The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Shiv Chowla, John Lewis, Jack Meaning and Sophie Stone for their help in preparing the text and to Nicholas Gruen and Matthew Taylor for discussions on these issues. I would like to thank David Bholat, Ben Broadbent, Janine Collier, Laura Daniels, Jonathan Fullwood, Andrew Hebden, Paul Lowe, Clare Macallan and Becky Maule and for their comments and contributions. 1 All speeches are available online at www.bankofengland.co.uk/speeches I am delighted to be here to celebrate the 100th anniversary of the founding of the Bank of Estonia. It is a particular privilege to be giving this lecture in the Bank’s “Independence Hall” – the very spot where, on 24 February 1918, Estonia’s Provisional Government was formed. The founding of the Bank of Estonia followed on the Republic’s first birthday in 1919. Reaching your first century is a true milestone for any person or institution. In the UK, when you reach your 100th birthday you receive a signed card of congratulations from the Queen. I am afraid I have no royal birthday card for you today. But I have the next best thing – another speech from another central banker. Times are tough in central banking. Central banks have borne much of the burden of supporting the global economy as it has recovered from the global financial crisis. -
The Run on the Rock
House of Commons Treasury Committee The run on the Rock Fifth Report of Session 2007–08 Volume II Oral and written evidence Ordered by The House of Commons to be printed 24 January 2008 HC 56–II [Incorporating HC 999 i–iv, Session 2006-07] Published on 1 February 2008 by authority of the House of Commons London: The Stationery Office Limited £25.50 The Treasury Committee The Treasury Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of HM Treasury, HM Revenue & Customs and associated public bodies. Current membership Rt Hon John McFall MP (Labour, West Dunbartonshire) (Chairman) Nick Ainger MP (Labour, Carmarthen West & South Pembrokeshire) Mr Graham Brady MP (Conservative, Altrincham and Sale West) Mr Colin Breed MP (Liberal Democrat, South East Cornwall) Jim Cousins MP (Labour, Newcastle upon Tyne Central) Mr Philip Dunne MP (Conservative, Ludlow) Mr Michael Fallon MP (Conservative, Sevenoaks) (Chairman, Sub-Committee) Ms Sally Keeble MP (Labour, Northampton North) Mr Andrew Love MP (Labour, Edmonton) Mr George Mudie MP (Labour, Leeds East) Mr Siôn Simon MP, (Labour, Birmingham, Erdington) John Thurso MP (Liberal Democrat, Caithness, Sutherland and Easter Ross) Mr Mark Todd MP (Labour, South Derbyshire) Peter Viggers MP (Conservative, Gosport). Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No. 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. -
David Ramsden: Monetary Policy from End To
Monetary Policy From End To End: Define, Decide, Deliver Speech given by Dave Ramsden, Deputy Governor for Markets and Banking The Strand Group Lecture Series King’s College London 20 November 2017 I’d like to thank Grellan McGrath for his assistance in preparing this speech, and colleagues around the Bank for their useful comments 1 All speeches are available online at www.bankofengland.co.uk/speeches End to End Monetary Policy This is my first speech in my new role as Deputy Governor for Markets and Banking, and as a member of the Monetary Policy Committee (MPC). It is a pleasure to be giving it in the newest part of King’s College London and in my position as a visiting professor here at King’s. And I’m delighted it’s the 25th Strand Group event, showing how this flagship series of policy relevant events has already become well established. One of the key differences between my old and my new role is the level of accountability. As Chief Economic Advisor to HM Treasury for the past 10 years, as would be expected under the civil service code, I was generally responsible for giving evidence-based advice to ministers who were ultimately accountable for their decisions to parliament and the public. That is very different in my new role in which I am directly accountable to parliament and public for decisions taken as a member of the MPC, Financial Policy Committee (FPC) and Prudential Regulation Committee (PRC). I also have a direct set of prescribed responsibilities under the Bank’s application to itself of the Senior Managers Regime – a framework developed to improve accountability at the top of financial services firms. -
Introduction to Network Science & Visualisation
IFC – Bank Indonesia International Workshop and Seminar on “Big Data for Central Bank Policies / Building Pathways for Policy Making with Big Data” Bali, Indonesia, 23-26 July 2018 Introduction to network science & visualisation1 Kimmo Soramäki, Financial Network Analytics 1 This presentation was prepared for the meeting. The views expressed are those of the author and do not necessarily reflect the views of the BIS, the IFC or the central banks and other institutions represented at the meeting. FNA FNA Introduction to Network Science & Visualization I Dr. Kimmo Soramäki Founder & CEO, FNA www.fna.fi Agenda Network Science ● Introduction ● Key concepts Exposure Networks ● OTC Derivatives ● CCP Interconnectedness Correlation Networks ● Housing Bubble and Crisis ● US Presidential Election Network Science and Graphs Analytics Is already powering the best known AI applications Knowledge Social Product Economic Knowledge Payment Graph Graph Graph Graph Graph Graph Network Science and Graphs Analytics “Goldman Sachs takes a DIY approach to graph analytics” For enhanced compliance and fraud detection (www.TechTarget.com, Mar 2015). “PayPal relies on graph techniques to perform sophisticated fraud detection” Saving them more than $700 million and enabling them to perform predictive fraud analysis, according to the IDC (www.globalbankingandfinance.com, Jan 2016) "Network diagnostics .. may displace atomised metrics such as VaR” Regulators are increasing using network science for financial stability analysis. (Andy Haldane, Bank of England Executive -
Andrew Haldane: the Creative Economy
The Creative Economy Speech given by Andrew G Haldane Chief Economist Bank of England The Inaugural Glasgow School of Art Creative Engagement Lecture The Glasgow School of Art 22 November 2018 The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Marilena Angeli and Shiv Chowla for their help in preparing the text. I would like to thank Philip Bond, Clare Macallan and Mette Nielson for their comments and contributions. 1 All speeches are available online at www.bankofengland.co.uk/speeches It is a great pleasure to be at the Glasgow School of Art (GSA). For over 170 years, the GSA has been one of the leading educational institutions in the creative arts in Europe. Today, the School continues to provide a conveyor belt of talent that is fuelling the rise in the creative industries, a sector growing rapidly and one where the UK can genuinely be said to be a world-leader. It is creativity, and its role in improving incomes in the economy and well-being in society, that I will discuss this evening. Now, there is a certain irony in me (a middle-aged career public servant) giving a lecture to you (staff and students at one of Europe’s creative hot-spots) about the determinants and benefits of creativity. Don’t worry, that irony is not lost on me. Nonetheless, I hope that by analysing creativity through an economic and historical lens we can learn something about its key ingredients. Developing those raw ingredients, and mixing them appropriately, has been crucial for social and economic progress over the course of history. -
Speech by Dave Ramsden at Inverness Chamber of Commerce
Resilience: three lessons from the financial crisis1 Speech given by Dave Ramsden, Deputy Governor for Markets & Banking Inverness Chamber of Commerce 30 May 2019 1With thanks to Tom Smith for his assistance in preparing these remarks and to staff across Bank, including Alex Baiden from the Bank’s Advanced Analytics division and Nick Bate and Liam Crowley-Reidy from the Bank’s Monetary Analysis directorate, for their many contributions, as well as my colleagues on the MPC for their helpful comments and suggestions. 1 All speeches are available online at www.bankofengland.co.uk/news/speeches 1 Introduction It’s great to be here in Inverness, and to be speaking here this morning. My talk today is going to focus on resilience. The first definition of resilience thrown up by Google is “the capacity to recover quickly from difficulties; toughness”. It seems apt that I should be focusing on this here in Inverness as Scotland itself is a famously resilient nation. Robert the Bruce was taught resilience by a spider. Scotland’s mountains epitomise geological resilience and tests the physical resilience of walkers and climbers. The Scottish economy has been through some tough times, but proved relatively resilient during the financial crisis, with Scottish onshore GDP falling much less than overall UK GDP. Even the existence of the Loch Ness monster has proved resilient to continued scientific investigation. And resilience is a word that you hear a lot these days (Chart 1). Psychological resilience is lauded as a virtue as life becomes more complex and challenging. Ecological resilience is becoming increasingly prominent as the world comes to terms with the threat from climate change. -
Remarks by Dave Ramsden at ISO 20022 Conference, Bank Of
Setting standards Remarks given by Dave Ramsden, Deputy Governor for Markets and Banking ISO 20022 Conference, Bank of England 6 December 2018 With thanks to Carsten Jung, Amy Lee, Varun Paul, Neil Pearston, Cameron Penny, James Southgate and Tom Smith. 1 All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx Welcome all to today’s ISO 20022 conference. ISO produces a lot of standards, but it’s those related to financial messaging, and in particular payments data which is what we’re here to talk about today. I’m going to open this event by talking a little more about why the Bank, along with Pay.UK and the Payment Systems Regulator (PSR), is so keen to work with the payments industry to deliver this important change to create the conditions for the next generation of innovation in UK payments and internationally. To the Bank of England, data, and the ability to collect, process and interrogate them, is vital to its ongoing ability to deliver its mission. Careful analysis of economic data is a key input into the Monetary Policy Committee’s deliberations. The Bank collects large quantities of data from the firms it supervises; that lets us understand their businesses individually and collectively, and so underpins the decisions of the Financial Policy Committee and Prudential Regulation Authority. In my own area, Markets and Banking, financial market data are crucial for calibrating and managing our own operations and risk management. The decisions that we make affect the whole economy, and ultimately serve the good of the people of the United Kingdom. -
The Tempered Ordered Probit (TOP) Model with an Application to Monetary Policy William H.Greene Max Gillman Mark N.Harris Christopher Spencer WP 2013 – 10
ISSN 1750-4171 ECONOMICS DISCUSSION PAPER SERIES The Tempered Ordered Probit (TOP) Model With An Application To Monetary Policy William H.Greene Max Gillman Mark N.Harris Christopher Spencer WP 2013 – 10 School of Business and Economics Loughborough University Loughborough LE11 3TU United Kingdom Tel: + 44 (0) 1509 222701 Fax: + 44 (0) 1509 223910 http://www.lboro.ac.uk/departments/sbe/economics/ The Tempered Ordered Probit (TOP) model with an application to monetary policy William H. Greeney Max Gillmanz Mark N. Harrisx Christopher Spencer{ September 2013 Abstract We propose a Tempered Ordered Probit (TOP) model. Our contribution lies not only in explicitly accounting for an excessive number of observations in a given choice category - as is the case in the standard literature on in‡ated models; rather, we introduce a new econometric model which nests the recently developed Middle In‡ated Ordered Probit (MIOP) models of Bagozzi and Mukherjee (2012) and Brooks, Harris, and Spencer (2012) as a special case, and further, can be used as a speci…cation test of the MIOP, where the implicit test is described as being one of symmetry versus asymmetry. In our application, which exploits a panel data-set containing the votes of Bank of England Monetary Policy Committee (MPC) members, we show that the TOP model a¤ords the econometrician considerable ‡exibility with respect to modelling the impact of di¤erent forms of uncertainty on interest rate decisions. Our …ndings, we argue, reveal MPC members’ asymmetric attitudes towards uncertainty and the changeability of interest rates. Keywords: Monetary policy committee, voting, discrete data, uncertainty, tempered equations. -
Speech by Andy Haldane at the Glasgow School of Art, Glasgow, On
The Creative Economy Speech given by Andrew G Haldane Chief Economist Bank of England The Inaugural Glasgow School of Art Creative Engagement Lecture The Glasgow School of Art 22 November 2018 The views expressed here are not necessarily those of the Bank of England or the Monetary Policy Committee. I would like to thank Marilena Angeli and Shiv Chowla for their help in preparing the text. I would like to thank Philip Bond, Clare Macallan and Mette Nielson for their comments and contributions. 1 All speeches are available online at www.bankofengland.co.uk/speeches It is a great pleasure to be at the Glasgow School of Art (GSA). For over 170 years, the GSA has been one of the leading educational institutions in the creative arts in Europe. Today, the School continues to provide a conveyor belt of talent that is fuelling the rise in the creative industries, a sector growing rapidly and one where the UK can genuinely be said to be a world-leader. It is creativity, and its role in improving incomes in the economy and well-being in society, that I will discuss this evening. Now, there is a certain irony in me (a middle-aged career public servant) giving a lecture to you (staff and students at one of Europe’s creative hot-spots) about the determinants and benefits of creativity. Don’t worry, that irony is not lost on me. Nonetheless, I hope that by analysing creativity through an economic and historical lens we can learn something about its key ingredients. Developing those raw ingredients, and mixing them appropriately, has been crucial for social and economic progress over the course of history. -
Quantitative Easing Inquiry
TRADES UNION CONGRESS – WRITTEN EVIDENCE (QEI0016) QUANTITATIVE EASING INQUIRY The TUC exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 48 member unions. TUC takes a view on QE, and macroeconomic policy more generally, because economic outcomes – above all recession – affect jobs, pay and working conditions. We want to see economic policy that provides work for all who want it, with inflation contained and a fair distribution of incomes. It is important to recognise the exceptional context in which QE has been so extensively used: first through the most severe global financial crisis since the great depression, second alongside government pursuit of contractionary policy, third alongside financial instability caused by the referendum result, and finally the pandemic. The approach follows longer-standing convention that monetary policy is the main tool for stabilising economies (so-called ‘monetary dominance’). This has had broader impacts, not least the consequence on public services and household incomes of cutting government spending, as well as the distributional impacts of QE. There are concerns too that the arrangement has fostered renewed financial excess long pre-dating the pandemic. TUC call for a wider inquiry into these outcomes and the relation with monetary and fiscal policies.1 1. Has the expansion of the Bank of England’s Quantitative Easing programme undermined the independence of the Bank, or the perception of its independence? What are the implications of this? Given monetary dominance, QE followed logically after central bank rates were cut to near zero. -
Speech by Martin Weale at the University of Nottingham, Tuesday
Unconventional monetary policy Speech given by Martin Weale, External Member of the Monetary Policy Committee University of Nottingham 8 March 2016 I am grateful to Andrew Blake, Alex Harberis and Richard Harrison for helpful discussions, to Tomasz Wieladek for the work he has done with me on both asset purchases and forward guidance and to Kristin Forbes, Tomas Key, Benjamin Nelson, Minouche Shafik, James Talbot, Matthew Tong, Gertjan Vlieghe and Sebastian Walsh for very helpful comments. 1 All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx Introduction Thank you for inviting me here today. I would like to talk about unconventional monetary policy. I am speaking to you about this not because I anticipate that the Monetary Policy Committee will have recourse to expand its use of unconventional policy any time soon. As we said in our most recent set of minutes, we collectively believe it more likely than not that the next move in rates will be up. I certainly consider this to be the most likely direction for policy. The UK labour market suggests that medium-term inflationary pressures are building rather than easing; wage growth may have disappointed, but a year of zero inflation does not seem to have depressed pay prospects further. However, I want to discuss unconventional policy options today because the Committee does not want to be a monetary equivalent of King Æthelred the Unready.1 It is as important to consider what we could do in the event of unlikely outcomes as the more likely scenarios. In particular, there is much to be said for reviewing the unconventional policy the MPC has already conducted, especially as the passage of time has given us a clearer insight into its effects.