Ricardo Reis's picture
Affiliation: 
London School of Economics
Credentials: 
AW Phillips Professor of Economics

Voting history

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?

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.

Addressing UK public finances after the mini-budget crisis

Question 3: Given the desired amount of deficit reduction, the Autumn Statement on balance:

Answer:
Should have relied more on spending cuts
Confidence level:
Confident
Comment:
Tax revenues/GDP already increased by 1.4% between 2020 and 2021 in the UK, versus only 0.5% in the OECD average.

Question 2: Relative to the Autumn statement, would the UK be better off reducing public debt

Answer:
No opinion or other
Confidence level:
Extremely confident
Comment:
To have an opinion, I'd have to spend more time quantitatively weighing different factors at play

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