Wednesday, May 19, 2010
Eurozone's problems worry the Bank
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

The ban on short-selling by the German authorities has added to eurozone jitters - a great example of policymakers shooting themselves in the foot - and the Bank of England's latest minutes show that worries about the eurozone were high on the monetary policy committee's agenda.

The May meeting was Kate Barker's last, after nine years on the committee, and has the roots of a future split on policy. While nobody on the MPC is comfortable with inflation so much above target, there are differences of view on the extent to which spare capacity will bear down on inflation. It remains an open question about whether Bank rate will rise before the end of the year but it is highly unlikely that we will get throough the next few months without at least some votes for higher rates. The minutes are here.