BOE Tenreyro: Extremely challenging times for the UK and the global economy

BOE Tenreyro: Extremely challenging times for the UK and the global economy

  • Energy prices are driving up prices in the short term, but have a disinflationary impact in the medium term
  • BOE needs to balance the impact of the energy with any secondary effects
  • I would expect the bank trade counter at 3% during 2023 to reduce output further below potential
  • policy will probably have to relax in 2024 to try to prevent inflation from falling below target
  • policy should focus on inflation, without compensating for loss of yields from guilt or exchange rates
  • most of the impact on demand from tighter banking trading still seems
  • my main reason for tightening monetary policy further last week was risk management
  • BOE needs to guard against overtightening policy
  • it is too early to judge whether the labor market will ease as forecast by the Bank of England
  • UK demand is likely to fall even if energy prices fall again
  • early signs and the UK labor market is beginning to relax
  • The UK is likely to enter a recession in the fourth quarter, mainly due to lower real income.
Melissa Galbraith
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