Global Central Bank Observation ｜ The inflation rate exceeds 11%of the nightmare, and the British Central Bank's "itching" rate hikes are criticized by the "itching" of the British Bank

21st Century Business Herald reporter Wu Bin Shanghai report

The British Central Bank has almost lost control of inflation and the economy.

On June 17, local time, data released by the EU Statistical Bureau showed that the final value of the euro zone in May has soared by 8.1%year -on -year, a historical highest level. But compared with Britain, this data can be described as a small witch. The Central Bank of the United Kingdom was expected to raise interest rate hikes 25 basis points on June 16. At the same time, the inflation rate of Britain would exceed 11%at the end of this year.

At the same time, the British economy is about to usher in quarterly shrinking. The Bank of England stated in the minutes of the meeting that it is expected that the British GDP (GDP) will decline by 0.3%in the second quarter of the United Kingdom, and stagflation concerns will become a reality.

However, in addition to the central banks of various countries generally listed anti -inflation as the primary goal, the Bank of England only raised the "itching" operation of 25 basis points slightly interest rates, which was criticized by the Federal Reserve.

FAWAD RAZAQZADA, a senior analyst at Jiasheng Group, told the 21st Century Business Herald that the Bank of England did not raise interest rates more actively now? Why wait? The reputation of the British Central Bank has been damaged. The weakening of the British exchange rate caused by the pigeon interest rate hike means that British inflation pressure will further intensify in the next few months.

In the past, the hosted pioneer has fallen behind

On December 16 last year, the Central Bank officials decided to increase interest rates by 15 basis points to 0.25%with a voting result of 8: 1, and launched the main central bank's "first shot of interest rate hikes". Since then, the Bank of England has raised interest rates non -stop, and raised interest rates to 25 basis points to 1.25%on June 16. This is also the fifth consecutive interest rate hike since December last year.

The Bank of England said that six members supported 25 basis points and three members supported 50 basis points, namely the Central Bank of the United Kingdom, Hasker, Mann and Sanders.

But on the other hand, the British Central Bank can be described as a early episode, and this week's interest rate hike is only one -third of the Federal Reserve. The Bank of England raised a total of 115 basis points five times, while the Federal Reserve later ranked up. Only three meetings accumulated a total of 150 basis points.

It should be noted that the "pigeon faction" of the British Central Bank once triggered a pound of pounds to a 150 points against the US dollar. Analysts also criticized the Bank of Britain's interest rate hikes too small, and the pace of cautious interest rate hikes in the first half of the year faced serious doubts.

Chris Beauchamp, chief market analyst of IG Group, said that compared with the Fed's "Tiger Roar" against inflation, the Bank of England's behavior is like a "timid cat". In the case of a cautious attitude in the British Central Bank generally, it is not possible to use the "strong" operation of inflation.

Similar to this, Charles Hepworth, director of GAM Investments, also said that the central bank officials promised to take strong action when necessary, which seemed a bit ridiculous, and it is now necessary. The Bank of England knows that the economy is slowing down, so he does not take strong actions as claimed.

Regarding future policies, the Bank of England said that if inflation continues to soar, it may join the tide of a sharp interest rate hike, saying that "the signs of continuous inflation pressure will be particularly vigilant, and if necessary The wording was supported by all members of the Bank of the UK, which was different from the situation in May. At that time, two officials refused to support the guidance of further interest rate hikes.

But the outside world sneered at this statement, Royal London Asset Management interest rate and cash head Craig Inches criticized that the overall information is that inflation is rising, and the labor market and salary data are not as slow as the UK officials imagine. If it does not slow, it will not slow. They need to speed up, what are they waiting for?

The performance of the British Central Bank down also disappointed the public. A survey conducted by the Bank of England this month showed that only 25%of the respondents were satisfied with the work of the British Bank of Britain's price control, and the public's confidence in the British Bank had fallen to the lowest point of history. Most respondents said that their views on inflation have been more pessimistic than at any time since the beginning of 1999.

Why do British and American monetary policy part ways?

Affected by the rapid surge in energy prices and food costs, the year -on -year growth rate of the British CPI in April had reached 9%, the highest level since 1982, almost 5 times the central bank's 2%target, and the highest among G7 member states. Even if it eliminates the price of food and energy with large fluctuations, the core CPI in the British April is as high as 6.2%.

As the upper limit of British energy prices in October will be adjusted again, the British Central Bank is expected to be slightly higher than 11%in October (previously predicted slightly higher than 10%), and the CPI will continue to exceed 9%in the next few months.

In this regard, the Bank of England explained that the main reasons for high inflation include the situation of Ukraine significantly raised global energy prices, the new crown epidemic promotes demand to turn to goods, and at the same time disrupts the supply chain. about. In addition, domestic factors such as tightening labor market and corporate pricing strategies have also played a certain role. Britain's core consumer goods price inflation is higher than the euro area and the United States.

Faced with the most severe inflation situation in developed countries, the Bank of England has raised interest rate hikes in the "itching of boots". Some people are puzzled. Why is the former hike pioneer now so careful? In the face of high inflation, the United States' actions are very different. This week, 75 basis points were directly "raised in violence". PIMCO (Pimco) North American economist Allison Boxer told reporters that the Fed is fighting against inflation at a cost at a cost, and it may continue to accelerate the pace of monetary policy in the next few months.

The future growth rate of the United States will continue to slow down. Boxer analysis said that due to the acceleration of tightening monetary policy, Fed officials have reduced economic growth and unemployment forecasting level. This point is different from the economic forecast in March. The rate hike in March does not mean that economic forecasts are significantly lower. Fed officials have already understood that the pace of accelerating the tightening of monetary policy will pay the price.

But for the Bank of England, the key problem is that the current British economy is worse than the United States, and the monetary policy space is much smaller than the Fed. Due to the increasing obstacles facing British economic growth, the freedom of interest rate hikes in the UK is being restricted.

According to data released by the National Bureau of Statistics this week, the British GDP was unexpectedly contracted by 0.3%month -on -month, and the market was declining for the second consecutive month, and the market was originally expected to increase slightly by 0.1%.

The OECD also predicts that with the increase in interest rates, increased taxation, decrease in trade, and the crackdown on the family of spiral rising food and energy price, the United Kingdom will become the weakest economy in the Seventh Kingdom Group (G7) next year. The worst of major economies outside Russia.

"Although the British central bank responds a little faster than most central banks, the current situation may be the worst," said Oliver Blackbourn, the manager of Junlin Dessen Investment Group. "Britain is more severe than the risk of stagnation in other major regions. The current inflation rate is higher, and economic growth expectations are weaker."

Today, the Bank of England is facing difficult challenges. It is necessary to control the price of prices and relieve the pressure of the pound. At the same time, it is necessary to prevent the British economy from falling into recession. In the statement, the British Monetary Policy Commission stated that it will "take necessary actions so that inflation can return to a 2%target in the medium term", and the scale, speed, and timing of further interest rate hikes will depend on economic prospects and inflation pressure Essence

Razaqzada analyzes reporters that the British Bank of the United Kingdom faces a lot of challenges and must balance inflation and stable growth. Recently, many macroeconomic indicators in the UK are not as good as expected. Inflation is eroding consumer disposable income, which may lead to an inevitable decline in the economy.

For the future, although the weak economy will restrict action, the high inflation that has not been seen for decades means that the Bank of England cannot sit still. Essence The market is expected to increase interest rates from the current 1.25%of the current four meetings of the Four Meetings of the British Bank, which means that the next three interest rate hikes and 25 basis points will be required to raise interest rates three times.

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