Andrew Sentance
@asentance
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Independent business economist. Former CBI Director of Economic Affairs and BA Chief Economist. Member of #BoE MPC 2006-11. Guitarist & organist.
Broxbourne, Herts
Joined July 2011
A country can cope with a period when either monetary or fiscal policy go wrong for a while. But a prolonged period when both are badly awry - as in the UK at present - means the economy is in trouble. A prolonged period of high inflation + disappointing growth is on the cards.
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Ah, fix the fiscal rules so you can spend more. Gordon Brown knows all about that because that’s what he did in the early 2000s, changing the definition of tge economic cycle so he could boost spending!.
Gordon Brown on thinking outside the box that Reeves has built round herself did Times deliberately choose an image showing Brown much bigger than Reeves?
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RT @DMcWilliams_UK: @asentance The words at the economists' briefing were rather tougher than the language in the report.
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I was featured on @SkyNews lunchtime news commenting on yesterday’s Bank of England rate decision. Follow link to watch YouTube video:
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Confused about what’s going on at the Bank of England? You should be. Higher inflation normally requires high or increasing interest rates. But now, higher inflation means lower interest rates. No surprise that 4 of 9 MPC members voted against this policy move. What a muddle!.
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My latest UK inflation forecast is higher than the Bank’s, both in the short term & medium term. I project inflation to run at 4-4.5pc from the autumn to next spring - droppimg back gradually to 3pc by end-2027 rather than falling rapidly to 2pc in early 2027, as BoE predicts.
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I’ve also got inflation over 4pc in September and also continuing above 4pc into the winter and next spring.
@asentance I reckon ~4.1% in September (according to my very rudimentary model). Could be there sooner with some upside surprises.
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Statements like this from Central Bank Governors are foolish, as Bailey’s predecessor Carney discovered with his so-called “forward guidance”.
*BOE'S BAILEY: RATES ARE ON A DOWNWARD PATH.
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RT @DilipShah_: The Bank of England cut interest rates to 4% with inflation of 3.6% running well above it's 2% target. The move has backfir….
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Interesting market move noted by @notayesmansecon.
Actually the UK five-year yield which is my leading indicator for mortgage rates has risen back above 4% since the decision.
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Bailey has already been caught out loosening policy too much when inflation is rising - back in 2nd half of 2021 and early 2022. He is making the same mistake again, when his Deputy Gov for Monetary Policy and Chief Economist are urging a more cautious policy.
BoE presser: "Are rates definitely on a downward path?" ."Yes", says Bailey.
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Shame that no-one asked Gov Bailey at the #MPC press conference why he didn’t vote with the 2 most expert MPC members on monetary policy - Huw Pil and Clare Lombardelli, BoE Chief Economist and Dep Gov for Monetary Policy. He sided with a much less expert group of MPC members.
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Big split on #MPC today: 4 votes - incl 2 senior Bank officials leading monetary policy - Pil & Lombardelli - opposed the rate cut. I can’t think of a previous occasion when the Governor voted against his Monetary Policy Dep Gov AND Chief Economist on such a key rate change.
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RT @julianHjessop: Thought for the day. 🤔. If Rachel Reeves has 'fixed the foundations', why has the 'black hole' more than doubled?….
bloomberg.com
UK Chancellor of the Exchequer Rachel Reeves is facing a £51 billion ($68 billion) shortfall to fill at the autumn budget, according to a prominent economic think tank that warned she will likely...
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My thoughts in today’s @theipaper debating the expected interest rates today despite cut with fellow ex-MPC member Michael Saunders. (Scan of print article so not behind a paywall now).
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Agreed - 4pc plus inflation in the autumn.
@asentance I have a gut feeling it will increase later in year too , and also inflation will hit 4.3 ish or more as it seems things are still getting more expensive.
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Fully agree Shaun. They may well be raising rates again by the end of the year!.
@notayesmansecon Agreed. I think the vote may be close though, and if they do cut, I doubt we will see any more this year.
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Great pic of hippos in Manchester, 1951. Always love to see hippo pics!.
Hippopotamuses Nick and Tony of Belle Vue zoo, Manchester, July 1951. They had long experience of begging for food (Mirrorpix/@MENnewsdesk).
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#BoE is expected to CUT interest rates today despite rising inflation - and little prospect that the UK will achieve a sustainable reduction to 2pc inflation in the next 12-18 months. The #MPC will be acting contrary to its mandate if it cuts rates today.
bbc.co.uk
The Bank of England cuts its key rate to 4%, the fifth reduction since August last year.
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Should the Bank of England cut the base rate today? I make the case for holding rates in today’s I-News.
liveapp.inews.co.uk
Two former members of the Bank’s interest rate-setting committee have differing views on what should happen to the base rate
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