GOING DOWN?: Bank of England Governor Mervyn King may soon be writing to the Chancellor to explain why inflation is undershooting
The committee believed "there remained a significant risk of undershooting
the inflation target in the medium term." The bank action reflected concern that inflation could fall toward zero, which on top of a recession, could strangle the economy.
The Bank slashed rates by 1.5% to 3% last week - their lowest level since 1955-because of a "substantial risk" of undershooting
its 2% inflation target as recession looms.
Whether in angle-compensated or ballistics mode, the rangefinder helps bowhunters avoid over or undershooting
targets by simultaneously measuring line-of-sight distance and vertical angle.
Traveling less distance (undershooting
) implies a less energy expenditure and thus we hypothesized that the undershoot bias was due to a more general energy-minimization bias.
These factors, coupled with weak economic growth, have increased the chances of inflation undershooting
the Government's 2% target in two years' time.
While all nine members agreed to hold rates at 4.75pc, some thought the MPC had more room to manoeuvre because the chances of inflation undershooting
the 2pc target in two years' time had increased.
In their view, the MPC had more room to manoeuvre because the chances of inflation undershooting
the 2pc target in two years' time had risen.
Although much that has occurred has been encouraging, some have nevertheless argued that we have been biased towards undershooting
Commenting after the Bank of England's move, the chairman of its Monetary Policy Committee said that "[t]o fail to cut would run the risk of undershooting
the inflation target and unnecessarily depress activity," given that risks seem to be on the downside for GDP growth.
Chris Humphries, director general at the British Chambers of Commerce, said: "Against the backdrop of a responsible Budget and persistent undershooting
of the inflation target, business will grow impatient for rate cuts in the months ahead."
equities got singed by Powell references to risks of "overheating" but they were balanced against undershooting
on the inflation front, so somewhat taken out of context.
Electrolux saw its pretax profit more than halve on the year to SEK696m in April-June 2011, undershooting
a SEK853m market consensus.
After rising in the last four sessions, the Nikkei index went into negative territory as Japan's core private-sector machinery orders in April dropped a seasonally adjusted 3.3 percent from the previous month, undershooting
market consensus, brokers said.