- UK economy faces prolonged period of balance sheet adjustment
- UK needs a credible plan to reduce fiscal deficit substantially, clear to everyone
- Need to rebalance to exports, away from imports, weaker sterling will help
- Ultimately QE will help to stimulate spending, smooth rebalancing, keep CPI near target
- Monetary policy can do very little to affect short-term moves in inflation
- Despite recovery in growth, output unlikely to return to pre-crisis levels for sometime
- Too loose policy could lead to asset price bubbles, higher inflation. Clearly at some point BOE will need to tighten policy, hard to say when
- If we could see credit growing more rapidly that would be welcome
- Q3 GDP numbers speak for themselves, no reason to second guess them. On average might expect it to be revised up slightly