- Economy has started to head back to normal
- Significant slack remains in labour market
- Companies appear to be at normal levels of capacity
- BOE’s “slack” estimate is forecast
- Spare capacity likely to be used up more slowly than in recent past
- The financial sector continues to heal
- Exports face difficulties from stronger pound
- Productivity growth will recover to pre-crisis levels in only in 3 years
- Volatility may rise as economies normalise
- Current low CPI partly due to one off factors, rather than underlying inflation pressure (that’s a mildly bullish comment)
- Heading back to normal likely to be accompanied by higher volatility
- Timing on rate rise will depend on slack, prospects for it absorbtion and inflation outlook
- Will defer asset sales at least until bank rate is at level from which it could be cut materially
- FPC will manage housing risks in UK
- BOE won’t take risks with stability and recovery
- Economy has still only just begun to recover
My first take is that he’s more or less sticking to the prior script. He’s got a dovish slant but hasn’t moved further down the dovish scale. I’m getting out of my cable shorts here.
