BOE's Ramsden: Structural shocks to the economy from Brexit can’t be offset by monetary policy
|BOE Deputy Governor David Ramsden, during a scheduled speech in Cambridge, was noted saying that structural shocks to the economy from Brexit can't be offset by monetary policy.
Key quotes:
• Weak productivity remains a key consideration of monetary policy
• MPC views weakness and uncertainty of UK productivity as a key consideration for monetary policy
• Pace of productivity influences what happens to inflation
• Most recent data show signs of productivity growth rising in the second half of 2017
• Still no confirmation that productivity pickup is sustained in the near-term
• UK business investment has been unusually weak relative to past recoveries
• MPC's judgement is that productivity growth will settle at just over 1% over the next three years
• MPC's view is that the economy's speed limit is likely to be around 1½%
• There are significant risks in both directions to the outlook for productivity
• Naturally lower productivity growth, and dampening effect of Brexit are risks to productivity
• A clearer transition path and future trading arrangements post-Brexit, could reduce uncertainty
• Latest evidence from Bank's Decision Maker Panel Survey suggests impact of Brexit holding back business investment growth may be less in 2018 than 2017
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.