NIESR: ‘A Welcome Decision from the MPC, but Risks Remain’

4 Nov 2016 10:15 AM

James Warren, Research Fellow at NIESR said “The MPC’s decision to hold the stance of policy unchanged is, on balance, the right one, especially considering the reiteration that policy stands ready to respond, in either direction, to changes to the economic outlook. The period of heightened near term inflation will likely erode the purchasing power of many households over the next year or so, leaving them less well off in real terms.  However, under the MPC’s own forecast, inflation remains significantly above target in the medium term. Such a prolonged period of above target inflation risks unhinging inflation expectations, especially at a time of acute uncertainty.”

Note: NIESR’s latest quarterly forecast (published 2nd November 2016) projects GDP growth of 2 per cent per annum in 2016 and 1.4 per cent in 2017 (see here for the associated press release).

Related information from the Bank of England can be found at:  Inflation Report, November 2016  

Notes for editors:

For further information and to arrange interviews, please contact the NIESR Press Office:

Paola Buonadonna on 020 7654 1923 / p.buonadonna@niesr.ac.uk

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