BOE chief economist Andy Haldane in London
UK economy growing at about 1.5% trend rate
Productivity is UK's greatest challenge now
Sees tight labor market, mounting pay pressures
BOE would still be accommodative after a rate hike
Would have raised rates in May if data held firm
This all sounds nuts to me. No slack? I don't know where these models come from but until everyone is working and is taking a side-job to make a bit extra (because the money is so easy), then there's slack.
As for raising rates, that's an incredible admission. Before Carney hinted that a rate hike wasn't coming on April 16, cable was trading at 1.43. Is the lack of one hike -- on a couple bad data points -- worth 1300 pips?
