2007 U.S. Economic Events & Analysis
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BOE Announcement
Definition
The Bank of England Monetary Policy Committee consists of nine members. The Committee meets monthly for two days, usually during the first week in the month in order to determine the near-term direction of monetary policy. Changes in monetary policy are announced immediately after the meetings, but no details are available until the minutes are published two weeks later. Why Investors Care

Released on 3/8/07
Change
 Actual 0bp  
 Previous 0 bp  
   
Level
  Actual 5.25%  

Highlights
As expected the Bank of England's Monetary Policy Committee left its key interest rate at 5.25 percent and the same as the federal funds target rate. The latest economic data have been mixed and the recent turmoil in global equity and currency markets made it less likely that the monetary policy committee would want to risk delivering a surprise hike to the already jittery financial markets. Inflation as measured by the consumer price index has been at or above the Bank's inflation target since July 2005, with a brief pause in March 2006. In January, inflation as measured by the consumer price index was 2.7 percent, lower than December's 3 percent but still considerably above the Bank's 2 percent inflation target. The Bank followed its normal practice of making no statement accompanying the decision to leave rates unchanged. Rather, Bank of England watchers will have to wait until the minutes of the meeting are released on March 21.

Trends
[Chart] The Bank of England's primary goal is to contain inflation and it uses an inflation target to do so. The Monetary Policy Committee has been using the harmonized index of consumer prices for its inflation indicator - the CPI - since January 2004. The Bank's inflation target has been 2 percent since that time. Previously, the MPC used the retail price index excluding mortgage interest payments as its inflation indicator and a 2.5 percent inflation target. There has been a substantial spread between the two measures of inflation which can be traced to the way they are calculated. Among the key differences is the exclusion of council taxes and owner-occupied housing costs from the CPI. Arithmetic means are used to combine individual prices to construct the RPIX while geometric means that allow for substitution are used in calculation of the CPI. This formula differential accounts for nearly half of the difference in the two rates.
Data Source: Haver Analytics

2007 Release Schedule
Released On: 1/11 2/8 3/8 4/5 5/10 6/7 7/5 8/2 9/6 10/4 11/8 12/6
Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov


 
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