{"id":121719,"date":"2023-12-20T09:39:14","date_gmt":"2023-12-20T09:39:14","guid":{"rendered":"https:\/\/blogcamlodipine.com\/?p=121719"},"modified":"2023-12-20T09:39:14","modified_gmt":"2023-12-20T09:39:14","slug":"bank-of-england-under-fire-after-getting-inflation-prediction-badly-wrong","status":"publish","type":"post","link":"https:\/\/blogcamlodipine.com\/politics\/bank-of-england-under-fire-after-getting-inflation-prediction-badly-wrong\/","title":{"rendered":"Bank of England under fire after getting inflation prediction badly wrong"},"content":{"rendered":"

Mark Cudmore’s reaction to inflation<\/h3>\n

The Bank of England is facing renewed criticism after making a wildly wrong inflation prediction last month.<\/p>\n

In its quarterly report after deciding to stick with the current high-interest rate level, the bank said it expected inflation to fall to 4.5 percent in the final quarter of 2023.<\/p>\n

However official figures out this morning showed a much more significant fall in inflation, to just 3.9 percent.<\/p>\n

The disparity has once again highlighted the Bank\u2019s overcautiousness in both hiking interest rates over the last year, and refusing to reduce them last month.<\/p>\n

Governor Andrew Bailey\u2019s economic boffins also predicted inflation would fall to just 3.1 percent by Quarter 4 of next year, though today\u2019s lower figures make that look even more pessimistic.<\/p>\n

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<\/p>\n

The Bank\u2019s response to the inflation crisis has seen Mr Bailey come under renewed criticism, with yet more piling on this morning.<\/p>\n

Top economist Julian Jessop pointed out that today\u2019s sharp fall in inflation demonstrates that UK CPI continues to mirror the equivalent US rate very closely, albeit with a six-month delay.<\/p>\n

Using that same measure, UK inflation should hit the 2 percent target by the first half of next year, despite the Bank of England continuing to insist Jeremy Hunt won\u2019t reach that milestone until late 2025.<\/p>\n

If proved correct, it could mean the Bank of England\u2019s forecasting sees hard-pressed Brits have to put up with overly high interest rates for much longer than necessary.<\/p>\n

Mr Jessop also said today\u2019s much better-than-expected inflation data makes the banks\u2019 fears about \u2018second-round effects\u2019 and wage-price spirals \u201clook even more misplaced\u201d.<\/p>\n

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