Will Carney Light Fireworks at Bank of England?

On July 1, former Bank of Canada governor Mark Carney will replace Sir Mervyn King as governor of the Bank of England. For many observers, this will herald a new dawn in the conduct of British monetary policy. We agree, but think the process will be more evolutionary than revolutionary.

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UK Budget: No Fiscal Consolidation, but Looser Money Ahead

We expect little change in UK fiscal policy in Wednesday’s budget. Instead the Chancellor George Osborne may try to nudge the Bank of England towards more aggressive monetary easing, putting further pressure on the pound.

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UK Equities Reach Inflation Tipping Point

Jon Ruff and Patrick Rudden As UK inflation surges ahead, equity investors should be concerned. With yields on inflation-linked bonds at extreme lows, we think real assets offer a better way to combat the risk of rising prices.

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UK Threat to Exit EU: Much Ado About Nothing

In a speech last week, British Prime Minister David Cameron raised the possibility that the UK might push the “nuclear button” and leave the European Union. We think both the threat and consequences of such a move have been exaggerated.

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Bank of England Still Aiming at the Wrong Target

The UK is celebrating a near three-year low in consumer price inflation, but we think the Bank of England (BOE) should be more worried about the role that money and credit play in the inflation process.

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Collapse in UK Investment Income Is Cause for Concern

A collapse in direct investment income was the main factor behind the UK’s record second-quarter current account deficit. It’s too early to know whether this represents a permanent shift. But, if it does, it would make rebalancing the economy more difficult and have important implications for the pound.

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