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Ash4781

The Future Of The Monetary Policy Committee (mpc)

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From reading the inflation report seems it'll be as expected meet every month, and keep the interest rate unchanged. So what do others think the future of the Monetary Policy Committee (MPC) is ?

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From reading the inflation report seems it'll be as expected meet every month, and keep the interest rate unchanged. So what do others think the future of the Monetary Policy Committee (MPC) is ?

This country is in a lot of trouble, there are going to be higher taxes and a lot of fiscal pressure on the country to tighten belts, so interest rates will remain low to offset those effects for a long time. I think rates get hiked roughly this time next year, August 2010, then steadily 0.25% per month for a while.

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From reading the inflation report seems it'll be as expected meet every month, and keep the interest rate unchanged. So what do others think the future of the Monetary Policy Committee (MPC) is ?

The same as always - to use monetary policy to achieve the target of 2% CPI set by the Government.

IMHO we're not done with quantitive easing. I wouldn't be at all surprised if it was extended again in November.

After that the MPC has to decide how to implement the 'exit strategy' ie whether to reduce the accommodative monetary policy by raising Bank Rate, selling gilts or a combination of the two.

The story from yesterday's press conference was that the MPC feels that if the Bank Rate follows the path expected by the markets then CPI will undershoot its target. In other words the MPC believes that either Bank Rate has to stay lower for longer or QE nees to be increased for CPI to hit target.

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From reading the inflation report seems it'll be as expected meet every month, and keep the interest rate unchanged. So what do others think the future of the Monetary Policy Committee (MPC) is ?

the mpc's narrow remit 'day job' was to control inflation by use of interest rates, where the inflation figure was a calculation designed to appear low (no HPI bias).

this cosy set up went belly up, because ultimately everything depended upon the very thing that wasn't in the inflation calc. The remit now (not published) is to avoid financial collapse and then if we get to the point where we still have a functioning society, get back to the 'day job' of inflation.

Therefore don't expect interest rates to be a reflection of inflation. That remit was dumped for priorities sake.

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From reading the inflation report seems it'll be as expected meet every month, and keep the interest rate unchanged. So what do others think the future of the Monetary Policy Committee (MPC) is ?

The MPC's job from now on it to ensure that an ample supply of paper, ink and zero's are in stock.

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