Comments: Shadow MPC narrowly rejects back-to-back rate hike

So given the SMPCs recent record of predictions, this should mean that the MPC will raise rates on Thursday. ;)

Posted by Minh at June 3, 2007 10:08 AM

Dear David,
The money supply debate is still with us. Delivering the Bernard Corry Memorial Lecture (last Thursday), David Blanchflower explained (again) why we should not worry (too much) about M4. The lecture is available from:
http://www.bankofengland.co.uk/publications/speeches/2007/speech310.pdf

Recently, the MPC has adopted a tough language, but in my view, priority should be given elsewhere. The MPC has made no effort to explain the differences/similarities between RPIX targeting and CPI targeting. This lack of information has added to the criticism that CPI targeting is inappropriate, and has increased calls to go back to the previous measure. Restoring CPI credibility is the first step towards convergence of inflation expectations back to the target. So simple, yet so difficult to work more on this?
Many thanks.

Posted by Costas Milas at June 3, 2007 10:31 AM

Broad money supply is the only value that will slow in its tracks with IR increases. I agree with Costas that CPI credibility needs to be examined for better targeting.

Posted by Hitesh Damani at June 5, 2007 10:03 AM
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