RPICPI User Group

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To foster co-operation and the exchange of information between the ONS, its advisory bodies and other users. Please see 'Aims of the RPI/CPI User Group' in the library for further details.

Election of BoE Committee members

  • 1.  Election of BoE Committee members

    Posted 02-11-2017 13:36
    We have today seen a long awaited rise in interest rates, following a false reduction last year.  The result of these errors has been a significant rise in inflation (whichever way you measure it).

    The people controlling such rates are not representative of the electorate.  The only way to get these things back under control is to have the individuals involved elected rather than appointed.

    GJ






  • 2.  RE: Election of BoE Committee members

    Posted 03-11-2017 08:59

    By Gareth's logic, we should also press for the members of the Statistics Authority, especially the National Statistician, to be elected.  That might lead to different decisions being taken about inflation measures.






  • 3.  RE: Election of BoE Committee members

    Posted 03-11-2017 09:57

    Most of the US Fed is elected in the regions, although not by the public. And the Fed is better and more competent than the Bank of England. Indeed the BOE tends to follow the Fed.


    I have never thought about the election of the Statistical Authorities.


    I have no confidence in our UK inflation infrastructure.


    And from the postings I see in this group, I don't detect any confidence on anybody's part. I wonder if there is some way of maybe polling the members on this ?








  • 4.  RE: Election of BoE Committee members

    Posted 03-11-2017 15:03
    I like the idea of elections by region.  I believe the UK has 12 regions which is just about the right number (one member per region).

    Also perhaps the governor of the BoE should not automatically chair this committee.  Perhaps the elected members should elect their own chairperson.

    GJ


  • 5.  RE: Election of BoE Committee members

    Posted 04-11-2017 09:44

    Gareth

    It is because the US Fed is regionally based that the local CPIs are so important in the US.

    In the Fed you could see that it was the area with the most local deflation that led the dialogue for low interest rates (Chicago). Since inflation has picked up there the concensus has shifted, quite rightly.

    Alan Greenspan clearly disliked the localism of the Fed debate and he tried to make the deflator index (PCE index) the target indicator. This led to a loss of control in the period 2005-2007.

    At the moment it is hard to see Fed interest rate decisions as responding to the deflator index but they seem responsive to the CPI regularly challenging the 2 % level.


    ------------------------------
    AL

    how the US CPI actually worked to contain housing inflation

    http://www.localisewestmidlands.org.uk/2012/housing-reflation-and-housing-inflation-alternative-inflation/
    ------------------------------



  • 6.  RE: Election of BoE Committee members

    Posted 05-11-2017 13:29
    Andrew

    My concern was particularly about the decision in August 2016 to reduce interest rates following the fall in Sterling after the EU referendum.

    A fall in Sterling was almost certain to generate inflation (bad) and stimulate exports (good).  The exports stimulated would be mainly manufactured goods and food (very regionally located).  This appears to me to be an advantage for the more peripheral parts of the UK, so long the inflation increase in contained.

    What the BoE did was to reduce interest rates and therefore lose control of inflation.  The interest rate reduction (and also the QE reintroduced - and which has not yet been stopped - the reversal of policy is not complete) has aggravated inflation with no obvious benefit to exporters.

    In short the BoE should not have taken the actions they did in Aug 2016, and have still to reverse some of them.

    Gareth.


  • 7.  RE: Election of BoE Committee members

    Posted 05-11-2017 15:01
    Personally, I would prefer to abolish UKSA altogether.

    Also the authority of the National Statistician should be confined to his area of management (viz. ONS).   And, he/she should report to the Cabinet Office, so that ONS has proper political management.

    Gareth