Thursday, December 11, 2008
Blanchflower and inflation - a race against time
Posted by David Smith at 03:30 PM
Category: Thoughts and responses

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David "Danny" Blanchflower, who has said he will not be seeking a second term on the Bank of England's monetary policy committee (MPC), once said that the Bank governor will have to write a letter explaining why inflation is too low - below 1% - before he, Blanchflower, leaves the MPC. He leaves at the end of May and inflation is already falling fast. He may well be right.

Today's inflation attitudes survey from the Bank shows that expectations have come down sharply. Median expectations for the next 12 months have dropped from 4.4% in August to 2.8% now. Even that looks a bit high. Details here.

The Bank's other big announcement was that Paul Tucker will replace Sir John Gieve as deputy governor with responsibility for financial stability. A good appointment; anything else would have been a surprise. The announcement is here.