Inflation
BoE’s Weale sees shorter working week adding to inflation
Various measures suggest UK workers will gradually cut back on the number of hours they work over the next few years, adding to unit labour costs, external MPC member says
Economists point to external woes as Central Bank of Brazil holds rates
Monetary policy committee leaves interest rate at 14.25% in surprise move; politics and fiscal policy making life harder for central bank, analysts suggest
Observers cast doubt on first Venezuelan inflation figures in a year
Central bank report puts annual inflation at 141% at end of September, after a year without publishing the data; some consider the figure to be too conservative
Carney says UK rate hike still some way off
Continued weakness in key indicators begins to puzzle policy-makers as Carney suggests there is room for the MPC to wait longer; CPI and core inflation on the rise
IMF cuts global growth forecast on back of EM challenges
Maurice Obstfeld says emerging markets and developing economies account for more than two-thirds of revisions; largest changes come in Brazil, where the MPC meets today
New York Fed president keeping eye on expectations
William Dudley expects inflation expectations to increase if the economy keeps growing at an above-trend pace, but any deviation could be cause for concern
Jamaican report says inflation risks balanced for 2016
Latest forecasts suggest inflation will rise to lower end of Bank of Jamaica’s target range in coming months; downside risks include reversal in food prices
BoJ paper: inflation expectations do not match target
Study of ‘dissonance’ in forecasts between economic agents and the central bank finds people only believe the BoJ will hit its target in the short to medium term – after that, inflation drops
Volatility fails to shake outlook as BoE holds rates steady
Latest MPC minutes are largely preoccupied with discussion of international developments, but falling oil prices and market volatility do not herald major change in stance
BoE paper seeks to improve forecasts with adaptive model
Using an adaptive model in conjunction with heavy-tailed t-distributions allows authors to deliver ‘substantial improvements’ in forecasting inflation
Brazilian paper charts impact of inflation signal on expectations
Agents update forecasts immediately after new information is released and the impact of new information is dependent on ‘precision’, a working paper suggests
Sarb deputy governor sees growing inflation risks ahead of MPC meeting
South African Reserve Bank policy-makers must assess ‘very carefully’ whether its stance remains appropriate, Mminele says; MPC meets January 21
Lockhart to watch inflation closely over the coming year
‘Mildly not wildly’: Atlanta Fed president remains optimistic for 2016 outlook, adding rate hikes not likely to occur at every meeting
Bank of England paper explores exchange rate pass-through using ‘big data’
Author finds the pass-through to import prices varies depending on the size of the exchange rate movement at the micro level, but it is a different story at the macro level
Risk that US public lowers inflation expectations, Chicago Fed president warns
The Federal Reserve’s undershooting of its inflation target in recent years may lower the inflation expectations of the American public, making future monetary policy harder, Evans warns
Room for monetary policy stimulus has ‘narrowed’ in many EMs, World Bank report warns
Little room left to use monetary or fiscal stimulus in event of growth shock in some countries, report says, pointing to role for structural reform
IMF paper sees Indian food prices shaping inflation dynamics
Working paper suggests food inflation will continue to outpace non-food inflation in the coming years, while potentially contributing 1.25 percentage points annually to headline figure
Venezuelan president cuts congress out of key central bank matters
President ‘shields’ central bank from opposition interference, according to one observer, with changes effective on eve of national assembly meeting
Riksbank prepared to ‘instantly intervene’ in krona
Executive board hands governor and first deputy the power to determine interventions to hold down the value of the krona, at unscheduled monetary policy meeting
Czech Republic chooses not to set target date for euro adoption
Government decision follows central bank and ministry of finance advice; authorities cite need for greater real economic convergence as a ‘main barrier’ to adoption
Chilean central bank spells out risks to outlook
Central bank expects inflation to return to 3% target by end of 2017 according to latest forecasts; details risks from home and abroad to macroeconomic outlook
Turkish inflation to drift toward target over next two years, report says
Turkey’s inflation rate will remain above the 5% target for much of the coming year, the latest quarterly report from the central bank says
Bank of Japan tweaks QQE with maturity extension and new ETF purchases
BoJ will continue to buy 80 trillion yen worth of JGBs a year, but with slightly longer to run to maturity; announces new ETF programme to offset sales of old stocks
Peso down almost 30% as Argentina lifts capital controls
Capital controls lifted allowing greater access to foreign exchange; peso slides by 29% against the US dollar as markets open