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Dollars and Pence

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Following Alan Greenspan’s testimony last Thursday, England’s counterpart Mervyn King spoke last night on British monetary policy.

While the U.S. has been listening for hints of a pending pause in rate hikes (now that inflation appears well-contained), the U.K. expects one or more rate cuts in the near future (despite the highest money supply growth rates in nearly a decade).

What else is different about the topsy-tourvy world of British monetary policy?  Here’s a quick comparative chart, from a bloke in his pyjamas:

  United States England
Policy Authority Federal Reserve Bank Bank of England
  (Federal Open Market Committee) (Monetary Policy Committee)
Head Honcho Alan Greenspan Mervyn King
Celebrity Resemblance Martin Landau Danny Aiello
Money Supply $9.2 trillion 1.3 trillion £ ($2.3 trillion)
Target Rate Fed Funds Rate BoE Repo Rate
Current Target 3.00% 4.75%
Trend Eight 1/4 point hikes Unchanged
Expectations Hike(s), then pause No change, or cut(s)
Sports Metaphor Identify remaining rate hikes by equivalent inning of baseball game. Be like a “true Yorkshire batsman: be ready to play on either foot .”
Policy Best Debated Over… Brandy and cigars Bangors and mash

Read the full text of King’s speech.

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  • They’re debating the English monetary policy while flying over a small town in Wales? Or the equivalent one in Maine? Or perhaps flying between the two?

    Hint: It’s Bangers and Mash, not Bangors and Mash.


  • Oops – good catch. Who can keep up with the Brits and all their krazy spellings?