BOE's Bailey: 'Substantial' Impact of Rate Rises to Come

The video discusses the anticipation of mortgage payment changes and the impact of recency bias on market understanding. It explores the slow pass-through from producer to consumer prices and its implications for inflation. The risk of over-tightening in policy decisions is examined, considering longer transmission lags and asymmetry. Finally, the inflation profile is analyzed, focusing on the central path and potential risks around it.

What is a key factor that limits the usefulness of historical data in understanding the current mortgage market?

• The increase in housing supply

• The recency bias

• The stability of interest rates

• The decrease in consumer demand

What is the current state of producer price inflation in the country?

• It is negative

• It is fluctuating

• It is significantly positive

• It is stable

What is a concern related to the slow pass-through from producer to consumer prices?

• It may lead to deflation

• It could cause more persistent inflation

• It will stabilize the economy

• It will reduce consumer spending

What does the longer transmission lag in monetary policy imply?

• No effect on inflation

• Immediate effects on inflation

• Reduced inflation volatility

• Delayed effects on inflation

What does the central path of inflation aim to achieve according to the monetary policy report?

• Increase inflation

• Stabilize inflation

• Decrease inflation

• Return inflation to target