Other than inflation, the UK captured recent headlines given its monetary and fiscal conundrum. Wanting to battle inflation (9.9% year‐over‐year through August) without inducing a recession, both monetary and fiscal authorities introduced plans that call into question the credibility of both bodies.
The Bank of England has raised rates to combat inflation yet found itself having to prop‐up UK government bonds through recent purchases.
Fiscal authorities have introduced stimulus plans, including tax cuts and energy relief, to fend off a recession. This will be an interesting case study given global inflation, the efforts of monetary and fiscal authorities to battle inflation while desiring an economic “soft‐landing”.