Connect with us
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Top Stories

BoE’s Haskel flags importance of independent budget forecasts

BoE's Haskel flags importance of independent budget forecasts 1

By David Milliken

LONDON (Reuters) -The Bank of England needs independent budget forecasts to do its work, BoE policymaker Jonathan Haskel said on Thursday, as uncertainty remains over the timing of the next set of forecasts from the Office for Budget Responsibility (OBR).

UK finance minister Kwasi Kwarteng announced 45 billion pounds ($50 billion) of tax cuts on Sept. 23 without the OBR forecasts which usually accompany big fiscal changes, triggering an abrupt sell-off on bond markets that forced the BoE to intervene.

Full forecasts are not scheduled until Nov. 23, when Kwarteng is due to announce a medium-term fiscal plan, but a government source has said the date is likely to be brought forward when parliament returns next week.

BoE chief economist Huw Pill has said that the central bank is likely to need to make a “significant policy response” on Nov. 3 when its Monetary Policy Committee (MPC) announces its next rate decision, due to the medium-term stimulus from Kwarteng’s plans.

British consumer price inflation hit a 40-year high of 10.1% in July and the BoE is concerned that inflation may become entrenched.

Haskel, in remarks released by the BoE, said calibrating this response would be easier if the bank had access to new OBR estimates for public spending and tax revenues to feed into its own models of economic growth and inflation.

“A sidelined OBR generates more uncertainty by worsening everyone’s information base,” he said in remarks to be delivered to Britain’s Society of Professional Economists later on Thursday.

Haskel added that he agreed with Pill’s assessment that “there was undoubtedly a UK-specific factor” behind the recent slump in British government bond prices.

Prime Minister Liz Truss initially said the moves reflected global factors rather than a negative financial market reaction to her and Kwarteng’s plans.

Haskel said Truss’s focus on improving medium-term growth was important, and highlighted lower labour force participation since the COVID-19 pandemic as a key area to tackle.

“Given the time it takes for monetary policy to have its full impact, the MPC is focused primarily on the medium and longer-term prospects for the economy,” Haskel said.

“The MPC has the tools and resolve to return inflation to target in the medium term,” he added.

($1 = 0.8949 pounds)

(Reporting by David Milliken; editing by William James and Susan Fenton)

Global Banking and Finance Review Awards Nominations 2022
2022 Awards now open. Click Here to Nominate


Newsletters with Secrets & Analysis. Subscribe Now