Thursday, July 21, 2016 - 11:42 BOE Weale: QE, Not Forward Guidance Ups Inflation Expectations 0
-Paper By Weale, Wieladek Knocks Impact of Forward Guidance
LONDON (MNI) - A Bank of England working paper by Monetary Policy Committee member Martin Weale show central bank forward guidance has negligible impact on inflation expectations, but quantitative easing does push them higher.
The paper by Weale and, among others, his frequent co-author Tomasz Wieladek, found that firms' inflation expectations rose by 0.22 percentage points in response to $50 billion of QE but forward guidance had an insignificant effect on inflation and wage expectations.
Weale was the only MPC member to oppose forward guidance when it was introduced by BOE Governor Mark Carney.
Thursday, July 21, 2016 - 10:58 BOE Talk: Recent Comments by MPC Policymakers 0
By Raina Hasan
LONDON (MNI) - The following are comments by Bank of England Monetary Policy Committee members in recent weeks:
Kristin Forbes - External Member, July 20, op-ed in the Daily Telegraph, London:
"Why not wait to get hard data, better understand the impact on different segments of the economy, and then carefully calibrate any monetary response to maximize the effectiveness and minimize the negative side effects?"
"There is also the traditional concern from looser monetary policy, inflation. Today's low inflation mainly reflects the temporary effects of past falls in energy and food prices.
Thursday, July 21, 2016 - 08:00 IMF Report: G20 Needs Decisive Action For Strong Growth 0
By Chase Levine
WASHINGTON (MNI) - Global growth will be even slower than initially expected and "downside risks have become more salient," the IMF said in a report Thursday, but G-20 economies can influence growth with strong economic policies.
"Global growth remains weak and fragile, and 'Brexit' marks the materialization of an important downside risk for the world economy," the IMF said its G-20 Surveillance Note prepared for the finance ministers and central bank governor's meeting in Chendgdu, China this weekend.
"Growth is already being held back by a combination of persistent, interlinked forces - including unfavorable pre-crisis productivity trends, the legacy of high private and sovereign debt, and hysteresis...
Thursday, July 21, 2016 - 02:33 REPEAT: EC Awaits Improved Commitments From Spain, Port - srcs 0
-Commissioners: Neither's 'reasoned request' adequate for close 0% sanction
BRUSSELS (MNI) - European Commissioners are still debating how to proceed with Portugal and Spain's breach of the excessive deficit rule, after "reasoned requests" from both countries were discussed during Wednesday's College meeting, but were judged not adequate to justify a decision for sanctions close to 0%, two well placed sources told Market News.
One source said that the Commission has told the Spanish and Portuguese governments that, legally, they still have until Friday to improve their requests, submit supplementary details and avoid heavier sanctions that, according to the rules, could go as...
Thursday, July 21, 2016 - 00:14 China SAFE: Outflow Pressure Moderates; Seen Stable in Future 0
SINGAPORE (MNI) - Capital outflow pressure in China moderated during the first half of this year and cross-border capital flows are expected to remain stable ahead, the State Administration of Foreign Exchange said Thursday.
"Outflow pressure has eased in the first half of this year, reflecting changes in the economy and the market," Wang Chunying, spokeswoman for the State Administration of Foreign Exchange, said, noting that the global financial market was stable for most of the time, except end June following the referendum in the U.K., while domestically, the Chinese economy remained within reasonable range and some indicators were solid.
"Expectations of yuan exchange rate depreciation have weakened.
Wednesday, July 20, 2016 - 18:11 BOE Forbes: Case To Delay Easing, Wait For Hard Data 0
By David Robinson
LONDON (MNI) - Bank of England Monetary Policy Committee member Kristin Forbes has made the case for delaying any easing in response to the June 23 vote to leave the European Union until hard data on the impact of the Brexit vote becomes available.
In an opinion piece in the Daily Telegraph newspaper, Forbes warned that inflation was already set to overshoot the 2% target within two years before the vote, and with sterling's depreciation since the referendum the MPC now faces a threat of elevated inflation.
"Why not wait to get hard data, better understand the impact on different segments of the economy, and then carefully calibrate any monetary response to maximize the effectiveness and minimize the...