View more on these topics

BoE’s Haldane says monetary policy must be ‘prompt and muscular’

Andy Haldane

The Bank of England’s Andy Haldane has said that easing of monetary policy needs to be delivered ‘promptly and muscularly’.

Haldane, who is on the MPC, which yesterday decided to hold interest rates at 0.5 per cent, says that the economic impact of the UK’s decision to leave the EU is not yet known.

Speaking on June 30, in a speech just published, Haldane said he would rather “run the risk of taking a sledgehammer to crack a nut than taking a miniature rock hammer to tunnel my way out of prison.

“In my personal view, this means a material easing of monetary policy is likely to be needed, as one part of a collective policy response aimed at helping protect the economy and jobs from a downturn.

“Given the scale of insurance required, a package of mutually-complementary monetary policy easing measures is likely to be necessary. And this monetary response, if it is to buttress expectations and confidence, needs I think to be delivered promptly as well as muscularly.

“By promptly I mean next month, when the precise size and extent of the necessary stimulatory measures can be determined as part of the August Inflation Report round.”

He added that the Bank is waiting on more data about Brexit before it can determine the future outlook for the UK economy, saying “at present, we have only the smallest trail of data breadcrumbs”.

However, Haldane appears to acknowledge that the Bank’s monetary policy tools are limited.

“The tools available to monetary policymakers, like the Bank of England, are small in number. The Bank can set only one interest rate – the interest rate on Bank of England money. This interest rate affects every region, every sector, every company and every individual that uses Bank money.”



Bank of England defies markets and holds interest rates

The Bank of England has defied market forecasts and kept interest rates on hold at 0.5 per cent. Mark Carney announced the decision, which went against market expectations. Ahead of the announcement markets were pricing in an 80 per cent chance of a rate cut, with many expecting the central bank’s QE programme to resume too. Base rate has not moved since it […]


Bank of England assessing multi-asset impact of property fund gating

The Bank of England is “actively working” with firms to deal with the impact the gating of property funds will have on multi-asset funds. Mortgage Strategy sister title Fund Strategy understands The Bank of England will tackle any “second order effect” gating property funds might have on multi-asset funds and any others holding those property funds. […]


Bank of England set to stem the tide on gated property funds

The Bank of England is considering new measures to halt the spate of property fund closures in the wake of the Brexit vote. The Telegraph reports the Bank and the FCA are looking at a number of ways to shore up the property sector following the trading suspensions by the likes of Standard Life Investments, […]

Globe - thumbnail

Considerations for overseas workers in Germany

With Germany’s strong economic growth leading the eurozone’s recovery, many UK businesses are keen to be part of the success story: recent data shows that there are currently more than 280,000* employees working for a UK-controlled company in the country.


News and expert analysis straight to your inbox

Sign up