OPEC is not able to raise oil prices
2022.11.29 09:06
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Budrigannews.com – Catherine Mann, a policymaker at the Bank of England, stated on Tuesday that one of her favorite indicators for determining how much longer the BoE will need to raise interest rates and when they can begin to be reduced is how much inflation expectations for the medium term are.
“Looking at medium-term expectations is a very important ingredient to my assessment of what the appropriate Bank Rate at the next vote might be,” Mann said during an online event that was hosted by The Conference Board, a business organization in the United States.
On December 9, prior to its decision on interest rates on December 15, the BoE will release its next quarterly survey of the British public’s expectations for inflation.
In October, British consumer price inflation reached a 41-year high of 11.1%, prompting the Bank of England (BoE) to raise interest rates to 3% for the first time since 1989.
Mann stated that the fact that price increases that were initially caused by bottlenecks following the pandemic and an increase in energy costs following Russia’s invasion of Ukraine were now visible across a wide range of services concerned her.
She stated, “This is a significant change in the underlying pace of inflation.”The central banker is concerned about this embeddedness.
Mann, who this year voted in favor of faster rate increases than the majority of her BoE colleagues, reiterated her belief that rapid interest rate increases were a successful strategy for taming inflation expectations and that rates could be cut once these expectations had subsided.
The BoE is expected to raise rates to 3.5 percent in December, with a peak of 4.5 percent or slightly higher in the middle of next year, according to the financial markets.
