Outlook: Bank must now pause for effect
Friday 21 August 1998
The argument for a pause is that time is needed to assess the impact of previously taken policy measures. There is now an equally strong case for the Bank to announce a further period of quiet reflection.
Judging by recent economic evidence, the Monetary Policy Committee should have a relatively easy task at its next meeting. There seems to be no case for a further increase in rates at this juncture, and the case for cutting rates now is also far from proven.
In fact, the evidence points to the conclusion that rates should be left where they are for some time to come.
The latest figures show that the economic slowdown is spreading from manufacturing into services. Investment is taking a hit, and consumer spending is moderating. All this is good news, but the battle is not over yet.
Earnings growth is still high enough to cushion consumers from the impact of small increases in mortgage rates, and indeed mortgage lending in particular and consumer credit in general remain surprisingly robust.
It all adds up to a good argument for the Bank to sit on its hands.There's much to be said for considered inaction. It's time to declare another pause.
- 1 Is this bridge haunted by the ghost of nu rave?
- 2 Woman filmed launching racist tirade against men on the Tube for speaking in 'own lingo'
- 3 The West has it totally wrong on Lee Kuan Yew
- 4 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
- 5 Noel Gallagher: I lost sh*tloads of money, a few million, didn’t tell my wife
Is this bridge haunted by the ghost of nu rave?
Saudi Arabia says it won't rule out building nuclear weapons
Germanwings plane crash: Andreas Lubitz 'had eyesight problems' and woke from nightmares 'screaming we’re going down'
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
David Cameron calls Labour 'hopeless, sneering socialists' while announcing 7-day NHS plans
Revealed: Putin's army of pro-Kremlin bloggers
The West has it totally wrong on Lee Kuan Yew
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...