This week’s interest rate decision from the Bank of England will be the first since the September “mini-budget” announcement unleashed a period of political and market turmoil. Markets and economists are counting on a 75 bps hike—the largest since 1989, and a quantum the ECB chose to adjust its benchmark rate just last week. But the real pain for the MPC is forecasting the economic and inflation outlook amid the current uncertainty around the new PM’s pending fiscal strategy.
Last week’s hugely encouraging news on the vaccine, as well as a slowing of new cases in Western Europe, was tempered by mounting growth concerns. Before the sunlit uplands of a vaccine-inspired rebound, a very challenging winter awaits us. In many parts, the coming months will see the recovery go into reverse.
Continue readingOne thing that has taken me a bit by surprise is the speed at which climate change has moved front and centre in economics. By-and-large, the environment and global warming were niche issues in business and financial debate. This was even the case early in 2019. But by the end of last year this had changed dramatically – helped in no small part by a Swedish teenager who I first saw addressing a crowd in front of the Brandenburg Gate in Berlin last March. Such was Greta Thunberg’s influence in this respect that she was named Time magazine’s person of the year 2019.
