The member of the Monetary Policy Committee (CPM) of the Bank of England (BOE), Dr. Swati Dhingra, warned that the United Kingdom (RU) could face a difficult path in terms of inflation, especially as the side effects of commercial policies with high fees of the Trump administration reverberate through the global economy.
However, this is not Dr. Dhingra’s base scenario, noting that a US dollar (USD) that is rapidly appreciated would be the key spark for inflation indicators of the United Kingdom, something that does not seem to be happening to any significant degree.
Key points
My vote in favor of a 50 -point rate cut was partly to make a statement about the management of the economy.
We could see some cost transfer due to US rates, but argument that the number would be quite small.
I do not rule out a scenario in which global trade is broken and the RU suffers inflation, but I do not think that is the direction in which we are heading.
My working hypothesis is that the depreciation of the dollar will not exert immense pressure on the import prices of the RU.
If the dollar really starts to climb, we have to worry about what the exchange rate dynamics do to the inflation of the RU.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
