Magazine article Global Finance

Will Statistical Fog Ground Bank of England?

Magazine article Global Finance

Will Statistical Fog Ground Bank of England?

Article excerpt

TAKING NOTE

UNITED KINGDOM

In a 1963 movie, "The VIPs," starring Elizabeth Taylor and Richard Burton, an elite group of British citizens with urgent reasons to get out of the country, find themselves stranded at a London airport because of fog.

A similar fate could beset UK monetary policymakers, as they wait for a statistical fog to lift before deciding when to raise interest rates from their current 48-year low of 3.5%. "At some point, reducing the present degree of monetary stimulus will be necessary in order to keep inflation on track to meet the target," says Mervyn King, governor of the Bank of England.

Some of the statistical fog hanging over the British economy lifted recently when the Office of National Statistics, the ONS, was forced to revise upward its estimates of economic growth, King told business leaders last month in Leicester, a city in the East Midlands. "But October is also a month when fog turns into storms," he warned. …

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