Research

A critical assessment of UK monetary indicators

Summary:  The Monetary Policy Committee of the Bank of England’s reliance on faulty indicators has led to suboptimal policy decisions and masked what is actually happening in the economy. The introduction of quantitative easing (QE) in 2009 has made the money supply relevant again and made a discussion about alternative money supply measures of direct ... Continue reading

SMPC votes Six / Three to Hold Bank Rate in December

In its December 2018 e-mail poll, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of six to three, to hold rates in December. The three favoured a 0.25% rise. Advocates of holding rates noted that broad money growth continues relatively weak, with some saying that the Bank should consider re-starting quantitative easing if ... Continue reading

Brexit uncertainty means Shadow Monetary Policy Committee votes Six / Three to Hold Bank Rate in November

At its meeting on 16th October 2018, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of six to three, to hold rates in November. The three favoured a 0.25% rise. All members had a bias to raise. Advocates of holding rates noted the uncertainty about the Brexit deal (if any) that the UK ... Continue reading
2016 was the year traditional allegiances scrambled, on both sides of the Pond. The year Brexit and the election of Donald Trump shook the foundations of conventional politics, famously causing Angela Merkel to declare “Europe must take its destiny into its own hands.” But the genesis of these shocks goes rather deeper, as some pointed ... Continue reading

SMPC votes Six / Three to Hold Bank Rate in September.

SMPC votes Six / Three to Hold Bank Rate in September. In its September 2018 e-mail poll, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of six to three, to hold rates in September. The three favoured a 0.25% rise. Advocates of holding rates noted that the Bank raised rates last month and ... Continue reading

Shadow Monetary Policy Committee vote on rate raise in June

In its June 2018 e-mail poll, the Shadow Monetary Policy Committee (SMPC) elected, by a vote of Seven to Two, to raise rates in June. One member voted for an immediate rise of 0.5%. Six favoured a 0.25% rise. Two favoured holding rates. Advocates of raising rates acknowledged that monetary growth has recently been weak ... Continue reading
Economic Theory
Plenty of theologians and Christian leaders have become animated by the temptations of money. According to St Paul, the love of money is the root of all evil. Pope Francis has insisted that “money has to serve, not to rule”. But what is money? In fact, it has a relatively mundane function. In simple terms, ... Continue reading

SMPC take poll on Bank rate raise in May

Ending six months of unanimity for rate hikes, the Shadow Monetary Policy Committee (SMPC) voted at its April meeting to raise Bank rate in May by eight votes to one. Six of the nine wanted to see a rise of ¼%, two an increase of ½% and one a hold. Seven members had a bias ... Continue reading

SMPC votes to raise Bank Rate in March

An email poll of the Shadow Monetary Policy Committee (SMPC) in March produced a vote to raise interest rates by nine to nil. All nine members voted for ¼% increase to a Bank rate of 0.75%. The bias of eight members was for further tightening and one for a neutral stance. All members saw the ... Continue reading
Research

A system of private banks ensures stability without a central bank

Summary:  In the late eighteenth and early nineteenth century, Scotland had a stable financial system. Its stability arose from the pressure that private banks, which had the right to issue bank notes, placed on each other to behave prudently. Unlike in England, the Scottish banking system had no central bank. If one bank within the ... Continue reading