What is the “right” exchange-rate?

One of the least publicised aspects of monetary policy is the effect of moves in the exchange rate. We tend to only get analysis when the media perceives that there is a crisis it can hang its hat on. This can, of course, often end up backfiring as a currency then rebounds in much the […]

27 May 2014 by Shaun Richards

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Is it “Damn the torpedoes, full speed ahead!” for the UK economy?

The latest data has confirmed the view that the UK economy is currently surging forwards at what might be called a fair old lick! The official data for the first quarter of 2014 told us this. GDP was 3.1% higher in Q1 2014 compared with the same quarter a year ago. That resonates with me […]

9 May 2014 by Shaun Richards

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The European Central Bank is singing “We just haven’t got a clue what to do”

This week has seen yet more problems appear for the European Central Bank as it struggles to get a grip on the state of the economy of the Euro area. At the moment it must feel like the Roman god Janus as it faces contradictory pressures across its jurisdiction. Also it finds that its past […]

2 May 2014 by Shaun Richards

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China’s shadow banking sector and the iron ore and copper problem

It is time again to examine what is going on in the economy of China as there are signs of building pressures there. One feature for the Chinese is however very reminiscent of London in the 1950s. The smogs afflicting her cities seem to be getting worse. Here is the latest from Bloomberg about earlier […]

24 February 2014 by Shaun Richards

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Mark Carney’s honeymoon period is over as Forward Guidance is rebooted let’s hope his luck isn’t

Today has seen what has become the set piece event of UK monetary policy which is the release of the quarterly Inflation Report of the Bank of England. This always had its own significance in terms of forecasts and the views which they implied but the new Governor of the Bank of England has stepped […]

12 February 2014 by Shaun Richards

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How the UK’s GDP figures are being gamed and manipulated

Today has seen the release of the economic output figures for the UK economy in terms of its Gross Domestic Product for the last quarter of 2013 and hence for the year as a whole. Whilst the numbers are good news as the UK is in a recovery phase I want to examine what they […]

28 January 2014 by Shaun Richards

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That’s another fine mess you have created Bank of England!

Today sees the beginnings of a collision between the stated monetary policy of the Bank of England and the trajectory of the UK economy. If we look at the policy, it was only a few short months ago on the 7th of August that this was announced to quite a fanfare. The MPC intends at a […]

22 January 2014 by Shaun Richards

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Why is Christine Lagarde creating fears about an “ogre of deflation”?

Yesterday saw a speech given by Christine Lagarde the Managing Director of the International Monetary Fund to the National Press Club in Washington DC. In it was a piece designed to be eye catching which I quote from below. With inflation running below many central banks’ targets, we see rising risks of deflation, which could […]

16 January 2014 by Shaun Richards

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Is Portugal’s debt burden unsustainable without another default?

One of the themes of this blog has been that Portugal is facing a debt crisis that sooner or later will end in it defaulting in a similar manner to that of Greece. This has been driven by two trends in the two major factors in such a decision. Firstly sustained economic growth is something […]

10 January 2014 by Shaun Richards

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The noose around the ECB’s throat is tightening but what policy options are left?

Tomorrow the Governing Council of the European Central Bank meets and at 12.45 pm (interest-rates) and 1:30pm (extraordinary measures) will let us know its latest policy moves. In the holiday season on December 30th I pointed out that the ECB would be spending the break considering what to do next and 2014 has opened along […]

8 January 2014 by Shaun Richards

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