BOE's Haldane: Data coming just a shade better than central bank scenario
Comments by BOE chief economist, Andy Haldane
- UK economy probably shrank by more than 20% in Q2
- Surveys show some stabilisation; modest recovery in spending, business sentiment
- No one is predicting a sharp bounceback
- This is perhaps a V-shaped recovery but a lopsided V akin to a protracted recovery
- Jobs may not return to pre-virus levels until 2023
- BOE is reviewing evidence on negative rates
- Key issues to consider are consequences on financial sector, economic confidence
- BOE has not remotely reached a view on negative rates yet
A bit of new recovery shape being introduced there by Haldane i.e. lopsided V-shaped. But overall, he doesn't sound anything too pessimistic and that's a key takeaway.
There's no major pushback on negative rates as he just reaffirms that they are talking about it but haven't reached any firm decision on whether to pursue it down the road.
I reckon that'll depend on inflation pressures and economic circumstances, with cues from the Fed also one to watch (so far nothing on this yet).