Tuesday, August 29, 2006
Bank’s Bean says cheap goods ‘banquet’ may be over
The Bank of England's chief economist Charlie Bean has warned that record oil prices could kill off the era of cheap goods, making it harder for policymakers to keep a lid on inflation. Cheap imports from the Far East and eastern Europe have kept the prices of goods down. In spurring greater competition, globalisation has provided a "favourable tailwind to central banks' attempts to hold inflation down," Mr Bean said at the annual gathering of central bankers in Jackson Hole, Wyoming, sponsored by the Kansas City Federal Reserve Bank. Yet he cautioned: "Winds can be changeable and the process may go into reverse at some point. To an extent this may already be happening .... There is no never-ending banquet under the sun."