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Steve Nickell Explains Himself

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BoE MPC member Nickell says spare capacity will check UK inflation

LONDON (AFX) - Spare capacity in the UK economy will help check inflationary

pressures, and will keep inflation below the Bank of England's target, according

to outgoing BoE Monetary Policy Committee member, Steve Nickell.

"Demand is not going to be fast enough to eliminate that spare capacity," he

said in an interview in The Times. "Therefore domestic inflationary pressures

are not going to be pushing inflation upwards very much at all."

And he said the inflationary threats from soaring energy costs and higher

import prices are set to fade.

"My best guess is that energy prices are not going to rise as fast as they

have been for [the past] two years," he said.

Nickell's longstanding view that inflationary fears are overblown, and his

successive lone votes at MPC meetings for cuts in UK lending rates have marked

him out as the MPC's foremost 'dove'.

Nickell, a part-time member of the MPC, who has been a professor at the

London School of Economics since 1998, has voted for a cut in lending rates at

every meeting since December.

"I'm not some sort of grandstander," he told The Times. "I don't especially

enjoy it, but I don't find it difficult because it all seems quite clear to me."

He leaves the MPC at the end of this month, and will be replaced by

Professor David Blanchflower of Dartmouth College in the US.

Maybe something here for KoN.


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...it all seems quite clear to me

Clear? This Nickell chap seems to be an uber dove.

What about financial stability my Nickell? It's clear to me that the debt growth is unsustainable - is that stability?

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Problem is, overcapacity = job cuts. Job cuts = less spending power and less spending power = deflation, deflation = job cuts, etc etc. It's a vicious cycle. Only way out is to inflate by printing more money, so we all have more and more which is worth less and less. Great!

It's all going to go Explode-05-june.gif

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Sounds like he's never left his ivory tower and....


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Your mate and mine (hah!) Roger Bootle pointed out in one of his Telegraph pieces (at least I think it was him .. or was it Guff Randal??) that spare capacity in Germany far exceeds that in the UK (unemployment twice the rate?) yet it too was experiencing inflationary pressures. Why? Lower workforce flexibility. Germans like work to come to them. We don't mind moving to where the work is ... oh dear, did somebody say something about house prices hampering that? ;)

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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