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The Economics Show
The case for holding rates, with Catherine Mann
Aug 12, 2024
Catherine Mann, a member of the Bank of England’s Monetary Policy Committee, shares her insights on the complexities of global monetary policy. She discusses the recent weak US jobs report and its ripple effects on central banks. Mann argues for holding interest rates steady amid falling inflation and economic volatility, while examining how these changes impact mortgages and renters. She highlights the differences in economic recovery between the UK, US, and euro area, and the importance of firm expectations in shaping future monetary decisions.
31:19
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Quick takeaways
- Catherine Mann emphasizes the importance of evaluating macroeconomic indicators to guide monetary policy decisions amid ongoing market volatility.
- Mann highlights structural risks associated with services inflation in the UK, indicating the need for careful oversight to achieve sustainable inflation rates.
Deep dives
Monetary Policy Decision-Making
Catherine Mann provides insight into her approach to monetary policy decision-making by discussing her analysis process before meetings. She outlines how she evaluates the potential actions of holding rates versus cutting rates, based on current economic data and forecasts. She shares that the strong argument for cutting rates stems from the alignment with the 2% inflation target already being achieved and the anticipated decrease in inflation expectations. This methodical assessment is crucial as it underscores the importance of understanding macroeconomic indicators before making policy decisions that impact the economy.
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