Wadhwani Says that Inflation is Likely to Remain Subdued

In a speech delivered to Agency contacts in Norwich on “The Current Policy Conundrum”, Dr Sushil Wadhwani, an external member of the Monetary Policy Committee at the Bank of England, argued that disinflationary forces in the economy are still strong.
Published on 24 July 2001

He argued that the weak global economy, falling commodity prices, more subdued import prices, falling capacity utilisation, and survey evidence that pipeline pricing pressures were diminishing all pointed to a reduction in underlying inflation. In addition, current measured inflation had been distorted by transient factors of which the most important was the highest rate of seasonal food price inflation (24%) since 1984.

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