Carney, Haldane and Tenreyro comments
- Says has discussed his term with the Chancellor and expressed willingness to stay through Brexit transition
- The economy is still operating as if there will be a deal
- Less than 20% of firms are putting in contingencies for a no-deal Brexit
- Real-income squeeze would return for UK households "for a few years" if there's no Brexit deal
- A 'no-deal, no-transition' deal is an extreme scenario
- Assumption is that currency will fall on no-deal, no-transition scenario, but won't say how far
Haldane:
- Odds of a no-deal Brexit at about 25% compared to 20% a few months ago, according to surveys of market participants
- It's not automatic that the shock to prices after a no deal Brexit would not necessarily be a one-off, it could damage to supply capacity of UK
- The passthrough of imported inflationary shocks can last a number of years, certainly over our policymaking horizon
- We've been surprised about how weak productivity has been
Tenreyro:
- Private sector wage growth has been relatively high
- Wages are going up
There's a hint here of inflation in a no-deal Brexit and the BOE hiking. That's in contrast to a rate cut immediately after the vote.
For me, I can't understand any thinking of a hike. Sure there will be imported inflation and sterling would fall but there would also be layoffs and a squeeze on profits.
