UK does not need indefinite low interest rates
- CPI expectations are still pretty well anchored
- New normal for rates may be a little bit lower than past level of 5.0%
Carney
- Complicated judgement to decide what new normal equilibrium for rates is
- Over next 3 years sees no scenario where rates would move to historic levels
That might take some steam out of the rally as it's the first time there's been a timeline slapped on the possible path of rates
- We have moved to a position where we are looking at normalising rates, not differences on whether we should increase QE
- We have improved the transmission of monetary policy communication
- Health of the financial system is likely to boost productivity
- It's productive to see companies fail over a recession as it causes other companies to become more resilient
- That's a slither of the low productivity puzzle that should be removed
McCafferty
- Low income jobs have kept productivity low
- We have seen a sharp rise in business investment
- It's been stronger than initially though and will help productivity
Miles
- There looks to be some light at the end of the tunnel for productivity
Cunliffe
- Stable productivity needs a stable financial system