Purple Brain
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CBI Distributive Trades Survey Data. An indicator of short term trends in the wholesale and retail distribution sector. Previous month’s value 34, estimated for October (MoM) was 33. The actual released just under an hour ago was 2! That’s a really bad slump by any reckoning.
For all the apparent benefits of forward guidance from BoE there is a possibility that the target unemployment level will never be reached if commerce continues to decline. Be interesting to see if Carney and the rest of his crew utilise their get out clauses if this trend continues. They allowed for three possible ‘knockout’ scenarios for reviewing the continuation of forward guidance under current terms.
• If in the MPC’s view, it is more likely than not, that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% target;
• If medium-term inflation expectations no longer remain sufficiently well anchored;
• If the Financial Policy Committee (FPC) judges that the stance of monetary policy poses a significant threat to financial stability that cannot be contained by the substantial range of mitigating policy actions available to the FPC, the Financial Conduct Authority and the Prudential Regulation Authority in a way consistent with their objectives.
Seems to be the last of these offers the widest scope for creative interpretation. They have both interest rates and additional stimulus supply to play with – and possibly a lot of other stuff I’m completely clueless about, but it’ll be interesting to see what the BoE watchers will be looking for or perhaps listening for in the coming weeks and months.
For all the apparent benefits of forward guidance from BoE there is a possibility that the target unemployment level will never be reached if commerce continues to decline. Be interesting to see if Carney and the rest of his crew utilise their get out clauses if this trend continues. They allowed for three possible ‘knockout’ scenarios for reviewing the continuation of forward guidance under current terms.
• If in the MPC’s view, it is more likely than not, that CPI inflation 18 to 24 months ahead will be 0.5 percentage points or more above the 2% target;
• If medium-term inflation expectations no longer remain sufficiently well anchored;
• If the Financial Policy Committee (FPC) judges that the stance of monetary policy poses a significant threat to financial stability that cannot be contained by the substantial range of mitigating policy actions available to the FPC, the Financial Conduct Authority and the Prudential Regulation Authority in a way consistent with their objectives.
Seems to be the last of these offers the widest scope for creative interpretation. They have both interest rates and additional stimulus supply to play with – and possibly a lot of other stuff I’m completely clueless about, but it’ll be interesting to see what the BoE watchers will be looking for or perhaps listening for in the coming weeks and months.