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Not all nations saw a significant change in the policies of central banking trends, and it is no surprise when we see them. The approaches for the governors may be different, they may or may not meet the goal of controlled inflation levels. To cite an example Japanese central bank's policy to keep its interest rates at ultra-low levels is a case study in itself. However, they might need to face the challenges once the economy functions in full swing.
United Kingdom's Swansong
The United Kingdom is said to have kept its interest rates on hold till January of this year when they moved to hike the rates by 4 percent. This keeps the point of elevated price levels for a long time. Despite the inflation was at an elevated level, it showed the economy was not making any progress. During the year the central bank is said to have increased until September of 2023, and post that decision to pause the rate hiking cycle to 5.25 until December ’23. The economy has had no signs of growth in recent months and remains at 0.3 growth. Many sectors
have fallen, showing poor performance. The housing market has seen a decline in average prices for 2023. However, if we look at it holistically the prices of homes have grown by 0.2 percent, which is a marginal increase. During the latter half of next year, the prices are said to have fallen close to 5-7 percent. From the outlook of next year, it is predicted that the slow growth and high inflation trends will continue. There is no prospect of growth until the end of 2024 and might show some revival in 2025. It would also reflect in the housing market, more or less a low growth trajectory as forecasts predicted for 2024.
We can only anticipate a change in the policy tone for next year to change the current scenes in the UK economy.
India’s Arjuna’s eye
In the case of India, the governor always tends to refer to the mythological character of Arjuna, who is always on target concerning the policy of inflation control and the other economic fundamentals of the nation. The reserve bank started its rate hiking cycle in February ’23, by 25 basis points at 6.50 percent. With the meeting in December ’23, the decision to the rate hike had been caused by the majority of the policy committee members. However, the inflation of India is said to be at an elevated range of 5.4 percent which is said to be eating into the consumption of the Indian consumer base. The target of keeping inflation in check is a difficult task considering the global economic conditions and the decisions taken by major central banks across the globe.
The economy is said to have a prospect of positive growth in 2024, which might show some promising economic activity utilizing investments and trade. There is a prospect of growth with an increase in demand anticipated next year. In terms of sectoral growth, the housing market is anticipated to see a boosted recovery. With elevated investment and job growth anticipated, we can anticipate a positive growth trend
for India.
Wishing all patrons and readers a Merry Christmas and a Prosperous 2024
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