RT by @benhabib6: Almost all the talk ahead of this week's Bank of England decision has been about whether the #MPC will raise interest rates again.

In contrast, my vote would be for an immediate ¼% cut (to 5%).

Just as importantly, I'd also vote to pause 'quantitative tightening ('#QT', or the process of selling back the government bonds that the central bank bought under 'QE').

Three main reasons:

1. both GDP growth and #inflation have been weaker than the Bank had expected

2. the Bank was already forecasting that inflation would fall below the 2% target in the medium term if rates stayed at 5¼%

and above all...

3. money and credit growth have collapsed, which tells you far more about where inflation is heading than the backward-looking data on prices or wages.

(I'd add that I wouldn't have voted to raise rates at the August meeting (the last increase), so consistency would also require me to vote to reverse that move now.)

🐦🔗: https://nitter.cz/julianHjessop/status/1719014903971721276#m

[2023-10-30 15:34 UTC]