BOE’s Haldane: UK economy is going gang-busters, may need to start turning off the stimulus tap

Dhwani Mehta FXStreet

The “UK economy is going gang-busters,” the Bank of England (BOE) Chief Economist Andy Haldane said, adding that “we may need to start turning off the stimulus tap.”

Additional comments

Need to keep spending demand in economy strong.

Some pay rises might be needed.

We see already some pretty punchy pressures on prices.

If pay and costs are picking up, inflation on the high street isn't very far behind.

We may need to start turning off the stimulus tap.

We could start tightening the tap on QE.

We could ultimately start to turn QE around.

We need not to become too dependent on monetary medicine.

In future we can't always be on emergency monetary measures.

Hopes there will not be big falloff in jobs market when furlough scheme ends.

Risk for me is that we might overshoot 2% inflation for longer than planned.

Market reaction

On the hawkish comments, GBP/USD jumped nearly 30-pips to hit daily highs at 1.4182.

The spot now trades at 1.4174, still up 0.13% on the day.

GBP/USD 15-minutes chart

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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