Breaking News,UK: BOE Real Time News items

• Blanchflower: Likely UK CPI Rate to Fall More Than 100bps Below 2% TargetPosted:10/07/2009 4:45 GMT by NeedToKnowNews
  Bank of England (BOE) policy-maker David Blanchflower said it's now likely that the annual inflation CPI rate will fall more than one full percentage point below the bank's 2% target. The CPI rate is currently at 3.1%, but 'there is likely to be a broader degree of dis-inflationary pressure withing the economy," Blanchflower said in a speech. "As demand weakens the degree of spare capacity within firms will rise, putting further downward pressure on consumer prices," he said. Sterling's depreciation was one risk to CPI's medium-term outlook, he said.
• BOE's Blanchflower Says Severe Contraction Set to Intensify in 2009Posted:10/07/2009 5:57 GMT by NeedToKnowNews
  Bank of England (BOE) policy-maker David Blanchflower said an especially severe contraction in output and employment has taken place since last autumn and is set to intensify in 2009. Blanchflower also cautioned against expecting a quick recovery. "The common assumption appears to be that the underlying forces putting downward pressure on economic activity, which we often have a poor understanding of, are likely to dissipate," he said. "But often these shocks to economic activity are more prolonged than anyone expects. We must not be over optimistic."
• BOE Gieve: UK Rate Cuts Not Yet Felt in EconomyPosted:15/07/2009 11:14 GMT by NeedToKnowNews
  Bank of England (BOE) Deputy Governor John Gieve said the UK's monetary and fiscal stimulus measures of the last few months 'have yet to be felt' in the UK economy, which is in the throes of a recession. "These measures will have a growing effect, even if we do nothing more," Gieve said in a speech. While the BOE's aggressive cuts in rates to 1.5% in January from 5% in October has been impaired by the volatility in the financial markets, "the cuts in interest rates are still having an impact," he said. Gieve, who is on the Bank's Monetary Policy Committee (MPC), said the main challenge for policy makers 'is to prevent a deep recession being unnecessarily prolonged.' In the medium term, the UK economy needs to be rebalanced, but 'if everyone tried to increase saving and cut borrowing immediately we could prolong the downturn painfully.' This tension between medium- and short-term goals is evident in the banking sector, he added. Here are a few other comments from his speech. * The UK CPI inflation rate will continue falling year over 2009 and 'may go well below the target rate of 2% despite the impact of sterling's depreciation.' * Now in the throes of a severe and coordinated contraction worldwide. In the UK, output could fall at its sharpest rate in decades and retail prices are likely to fall for the first time in almost half a century. * The special features of this recession compared to past recessions are its global reach and the severity of the pressures on banks 'many of whose survival has been at risk.' * Not all banks have stopped lending.