 · UK
producer prices spurted in March with the headline rate rising to a 17
year high at 6.2% Yr/Yr. Core as headline prices continued to move up
and do so in the wake of a BOE rate cut.
National Statistics said that the BOE did not have this number in
hand when it decided to cut rates. Clearly the central banks around the
world are pursuing very different strategies and face different
circumstances as they craft their rate setting tactics. The ECB still
has still-firm growth and is leaning against inflation trends with
headline rate over 3% that exceeds its 2% ceiling. The Bank of England
having seen a bank nationalized, sees economic growth risk and has cut
rates even as it was warned on inflation although it sees inflation
coming down. In the US the Fed has cut rates as growth has slowed
sharply but the Core CPI rate, it quasi-target, has come back down to
within the Fed’s comfort zone. The Fed has no formal target or ceiling
for inflation but does pay more attention to the core CPI and PCE (ex
food and energy) rates.
|