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  • Inflation, monetary policy, fiscal policy

Click to the article and then answer the questions:

BoE outlines two bleak scenarios for taming inflation

  • ‘Whatever happened, said the central bank, the British economy was slipping into a recession that would last at least all of next year’. Define recession

  • ‘Europe, unlike the US, has been grappling with soaring gas prices’. What term is used to describe this type of inflation?

  • With reference to chart 1, based on market interest rate expectations, what is the outlook for UK GDP in the next four years?

  • ‘By the end of the day, markets had taken scant notice of the BoE’s dovish scenario’. Economists often reference doves and hawks. Explain

  • The chancellor, Jeremy Hunt, looks set to tighten fiscal policy in his autumn statement on 17 November. Evaluate the extent to which this will reduce the requirement for further monetary tightening by the Bank of England

Gavin Clarke, Emmanuel College

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