Magazine article Public Finance

Numbers Game

Magazine article Public Finance

Numbers Game

Article excerpt

PF's monthly roundup of statistics covering the public finances, economic growth, unemployment and more

If we believe Bank of England governor Mark Carney, 'Forward Guidance' hasn't been killed off, it has simply moved into its 'next phase'.

Carney has confirmed that interest rates will no longer be linked so explicitly to the jobless level. Any movement in rates is to be determined not just by unemployment but by a range of indicators, including wage growth and productivity.

The policy change was necessary because unemployment is falling rapidly and is expected to hit the previous trigger point - 7% - later this spring. It is currently at 7.2%, following a fall of 125,000 in the three months to December 2013.

The governor has stressed that economic recovery in the UK is not secure and that when rates rise they will do so gradually.

He has been helped by steady falls in inflation. The Consumer Prices Index reached 1.9% in January, the first time it has fallen below the 2% target in more than four years.

Estimates from the Bank suggest that CPI inflation will dip further to 1. …

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