Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Answer:
ECB policy rates will be appropriate in 2023.
Confidence level:
Not confident
Comment:
Not even the ECB is confident, since at this inflection point, there is a lot of uncertainty. As in the previous question, more than whether the peak is 3.5, 3.75 or 4%, is how long will be needed to keep rates there to bring inflation decisively back on target
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Answer:
The MRO rate will peak above 3.5%.
Confidence level:
Very confident
Comment:
A tougher question than where will be the peak is is how long will interest rates there. A while, I think.
Question 1: How likely is it that peak headline euro area inflation is behind us?
Answer:
Likely
Confidence level:
Confident
Comment:
Another large energy shock does not seem in the horizon. The last few months have had energy contributing to very low inflation, and the next several months will likewise be in the same direction. So, while core inflation may well not have peaked, headline probably has peaked. I would add that if inflation was to exceed 10% again, several months after October 2022, this would be a serious indictment of monetary policy that has a 2% target.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
Prospects for Euro Area Inflation in 2023
Question 3: Under its current policy trajectory, with rates peaking at 3.5%, which of the following is most likely?
Question 2: Relative to market forecasts of the ECB’s MRO rate peaking at 3.5%, which of the following is more likely during 2023?
Question 1: How likely is it that peak headline euro area inflation is behind us?
Addressing UK public finances after the mini-budget crisis
Question 3: Given the desired amount of deficit reduction, the Autumn Statement on balance:
Question 2: Relative to the Autumn statement, would the UK be better off reducing public debt
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