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