Letter to Eddie George May 2002 Monetary Policy 01 May 2002 Dear Sir Eddie You will have noticed, I know with real regret, that our advice has been lacking for some time. As a result policy has gone a little astray, principally with the decision to raise interest rates. This sent out a series of wrong signals and was construed as a sign that rates are on their way back up. It is time, therefore, to resume our monthly letter of advice to avoid this happening again. Read more...   Letter to Eddie George August 2001 Monetary Policy 01 August 2001 Dear Eddie Public speculation is more febrile then the settled stolidities of bankers so it’s not surprising that over the last month expectations have swung from a feeling of British exceptionalism, "look we have come through", to gathering gloom and a feeling that the world wind down is dragging Britain down with it. Our guess is that this mood swing will strengthen the Bank in its "wait and see" policy which has already put it out on a limb. Read more...   Letter to Eddie George July 2001 Monetary Policy 01 July 2001 Dear Eddie Your strategy this month is likely to be to play safe and maintain your high interest rates/high Pound policy. This would be a mistake leaving Britain dangerously exposed, and out on a limb compared to the stronger economies of Germany, Japan, France and the US, all of which have lower real interest rates. Read more...   Letter to Eddie George April 2001 Monetary Policy 01 April 2001 Dear Eddie Along with most commentators, the Labour Economic Policy Group was disappointed by the Bank`s failure to follow through on its earlier, very marginal, reduction of interest rates by a more substantial reduction last month. Read more...   Letter to Eddie George March 2001 Monetary Policy 01 March 2001 Dear Eddie Our advice to the MPC is to follow through on the process it belatedly began last month. Reduce interest rates by 1.75% rather than leaving the UK, as it now is, sitting out on a limb with higher rates than other advanced economies, very high real rates, and an inflation target which is consistently undershot your target. High rates have compounded and sustained the long-standing British problem of interest and exchange rate overkill. Bring interest rates below Europe’s and the US so that Sterling comes down to a more reasonable level. Read more...   Letter to Eddie George February 2001 Monetary Policy 01 February 2001 Dear Sir Eddie   It is inconceivable that the MPC will continue to resist the rate cut which has been necessary so long, so our advice this month can be briefly given. The cut you will make is far too little far too late. The game has moved ahead of the MPC leaving it lagging behind events, rather than anticipating what is clearly happening and using its powers of management to ward off problems. Read more...   Letter to Eddie George November 2000 Monetary Policy 01 November 2000 Dear Eddie Our advice to the MPC this month is unchanged. Reduce interest rates by 2% and get the Pound down to a more realistic valuation. Only this will allow Britain to compete on level terms in the Single European market, boost an economy which has been growing at well below the rate both possible and necessary, and allow producers a prospect of profitability and investment. Read more...   Letter to Eddie George September 2000 Monetary Policy 01 September 2000 Dear Eddie Our advice this month, as last, is to reduce interest rates by 2% and use every effort available to you to get the exchange rate down, both against the Dollar and more particularly against the Euro. Inflation is no problem and no justification for rates as high as this. Growth is inadequate and slowing. Sterling remains substantially overvalued. Read more...   Letter to Eddie George June 2000 Monetary Policy 01 June 2000 Dear Eddie Our position remains simple and straight forward. You should reduce interest rates by an initial two per cent. You have described our views as "out of date". They are that Britain must boost growth to a substantially higher level by expanding demand, making the pound competitive and keeping it there. Read more...   Letter to Eddie George May 2000 Monetary Policy 01 May 2000 Dear Eddie Our concerns centre on the real economy of production and employment. So our recommendations to the Monetary Policy Committee this month are the same as in previous months: reduce interest rates substantially. Read more...   Letter to Eddie George February 2000 Monetary Policy 01 February 2000 Dear Eddie We haven’t been able to put the views of the Labour Economic Policy Group before your last two MPC meetings owing to absence in New Zealand. So a belated merry new Millennium. Please make it happier economically than the last with its low growth and miserable performance. Read more...   Letter to Eddie George November 1999 Monetary Policy 01 November 1999 Dear Eddie Interest rates in this country are too high in both real and comparative terms and the exchange rate has long been far too high. So our recommendation this month, consistent with all our earlier representations, must be that you reduce interest rates by 2% and that you aim to bring British rates into line with Europe’s since there is no conceivable reason why ours should be double theirs. Read more...   Letter to Eddie George October 1999 Monetary Policy 01 October 1999 Dear Eddie Like many people and the economic commentators we ourselves esteem, we were both surprised and concerned by the MPC’s paradoxical decision to raise interest rates last month. The reasons given for it just do not stand up. If house price rises are such a problem a mini-rise in rates has no effect at all while the ritual claim that a small increase now checks inflation and prevents a bigger one later is questionable when inflation is so low. Read more...   Letter to Eddie George September 1999 Monetary Policy 01 September 1999 Dear Eddie Your Monetary Policy Committee is divided. With no consensus on the future course of inflation it isn’t sure what to do next. In that situation it will play safe and opt for no change. This won’t please the pundits and institutions who represent Britain’s excessively powerful financial interest. Read more...   Letter to Eddie George August 1999 Monetary Policy 01 August 1999 Dear Eddie Like us, you will have observed with dismay the growth of speculation along the old outdated lines that because the economy shows signs of a slight stirring to performance above the pathetic you must increase interest rates. The fear is that inflation is certain to result from the fact that growth is half a percent higher than expected and unemployment is still falling. Read more...   Letter to Eddie George June 1999 Monetary Policy 01 June 1999 Dear Eddie It is clear from the confused comment and speculation in the run-up to this meeting of the Monetary Policy Committee that uncertainty prevails. Economists and pundits disagree about the state of the economy, the way it is moving, and what action you should, and are likely, to take. We don’t think there has ever been as much disagreement. Read more...   Letter to Eddie George April 1999 Monetary Policy 01 April 1999 Dear Eddie We note with some concern that last month, the first for some time in which the Labour Economic Policy Group did not make a submission to the MPC, was also the first for some time in which you went wrong by opting for "wait and see" instead of continuing the process of interest rate reduction. Read more...   Letter to Eddie George February 1999 Monetary Policy 01 February 1999 Dear Eddie We have been making regular representations to the Monetary Policy Committee for well over a year and with some success. After a period of ignoring our views, even perversely doing the opposite on occasions, as the deflationary scenario we predicted began to eventuate, you started belatedly to accept our arguments, even though interest rates have not been reduced as soon and as far and fast as they should have been. Read more...   Letter to Eddie George January 1999 Monetary Policy 01 January 1999 Dear Eddie We have been making regular representations to the Monetary Policy Committee for well over a year and with some success. After a period of ignoring our views, even perversely doing the opposite on occasions, as the deflationary scenario we predicted began to eventuate, you started belatedly to accept our arguments, even though interest rates have not been reduced as soon and as far and fast as they should have been. Read more...

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