Text of speech being made by the BOE chief economist Andy Haldane
GBPUSD down to 1.6052 from 1.6078 but back to 1.6067
- diverging economic forecasts may continue
- data since June has made him “gloomier” on the economy
- data implies rates may be lower for longer than forecast in June
Full speech here
GBPUSD still falling to 1.6032 EURGBP up to 0.7972 as we get another reminder that interest rates are not going up anytime soon
Three months on, it is time to update the batting averages. Ian Bell’s batting average has remained at 45 – the front foot recovery has remained on track. But over the same period, Joe Root’s has risen to 51. Cricket statisticians and financial markets are agreed. While still a close run thing, the statistics now appear to favour the back foot.
On balance, my judgement on the macro-economy has shifted the same way. I have tended to view the economy through a bi-modal lens. And recent evidence, in the UK and globally, has shifted my probability distribution towards the lower tail. Put in rather plainer English, I am gloomier.
That reflects the mark-down in global growth, heightened geo-political and financial risks and the weak pipeline of inflationary pressures from wages internally and commodity prices externally. Taken together, this implies interest rates could remain lower for longer, certainly than I had expected three months ago, without endangering the inflation target.
Haldane- not in a rush to hike rates