Spring Statement Special With ex-Bank of England Policymaker Andrew Sentance CBE

In this week’s podcast Michael Brown (Senior Market Strategist from Pepperstone) and I look back at this week’s UK Spring Statement with a special guest, ex Bank of England policymaker Andrew Sentance CBE, as well as discussing the overall economic outlook in a world that is becoming less globalised and more factional.

Discussion points:

• Markets are currently experiencing choppy conditions due to tariff announcements.
• Andrew Sentance provides insights from his time on the MPC.
• The OBR’s independence is questioned in light of its close ties with the Treasury.
• Forecasting five years ahead is not a sound basis for economic policy.
• Very low interest rates can create economic distortions.
• A mix of experiences is essential for effective economic policy-making.
• Independence of thought is crucial for the MPC’s effectiveness.
• Communication from the Bank of England needs improvement.
• Dissenting views on the MPC can lead to better policy outcomes.
• Local knowledge is vital for understanding the UK economy.
• Businesses prefer stability over the lowest possible interest rates.
• Historical high interest rates caused significant job losses in manufacturing.
• The equilibrium rate of unemployment is difficult to pin down precisely.
• Inflation predictions may not account for all economic factors.
• Wage growth remains high, impacting inflation rates.
• The MPC’s approach to interest rates should be cautious and not overly formulaic.
• Data analysis is crucial for effective monetary policy decisions.
• The labour market shows signs of complexity beyond simple unemployment figures.
• Communication strategies in monetary policy can benefit from creativity.
• The relationship between inflation and wage growth is critical for economic stability.