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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Aug 08 2012

Inflation's Influence on the BoE

In the wake of the Bank of England’s (BoE) decision last month to renew quantitative easing, many saw U.K. CPI growth, which recently fell to a 31-month low, as a key factor. However, with weak economic growth persisting while inflation still remains above the BoE’s 2% target, the U.K.’s central bank faces the dilemma of promoting growth despite too high inflation.

ECRI’s latest analysis clarifies the cyclical trajectory of the U.K. inflation rate, indicating whether CPI growth will continue its decline and leave the BoE free to ease policy, or limit bank action by staying above target.

Related Insights

The Yo-Yo Years

ECRI March 1, 2012

The convergence of two cyclical patterns virtually dictates an era of more frequent recessions in developed economies. As a result, and because of the Bullwhip Effect, growth in developing economies is going to be jerked around more than people think, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.

 

Related News & Events

Eurozone price pressures at 27-mth low

Reuters August 3, 2012

ECRI FIG data show that price pressures in the euro zone fell to a 27-month low in June, easing in all four of the bloc's biggest economies. More