Bank of England Chief Economist Andrew Haldane said the U.K. interest rates could remain lower at a record low for a longer period than he expected three months ago.
If there is a genuine uncertainty about the path of the economy, the optimal policy response may be to avoid the worst outcomes, he told local business leaders in Kenilworth, central England, Friday.
He observed that the U.K. economy is as weak as at any time in the recent or distant past and it is firmly on the back foot.
“The UK economy appears to be writhing in both agony and ecstasy,” Haldane said. “It is twin-peaked.”
“While still a close run thing, the statistics now appear to favour the back foot,” he said. “Put in rather plainer English, I am gloomier,” he said.
At the August and September meetings, only Ian McCafferty and Martin Weale sought a quarter point hike in rates. They observed that even after a 25 basis-point hike, monetary policy remains extremely supportive.
Governor Mark Carney suggested last month that the time for raising rates is getting closer and the timing of such an action will depend on the data.
Haldane observed that the growth in GDP over the past two years has not been greatly dissimilar to previous recoveries. According to MPC forecasts, that recovery is set to continue in the period ahead, he said.
Earlier in October, the International Monetary Fund maintained its estimates for the U.K. even as it downgraded its growth projections for the global economy. The lender estimated 3.2 percent economic growth for the U.K. this year and 2.7 percent the next year.
by RTT Staff Writer
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BoE's Haldane Says Interest Rates Likely To Remain Lower For Longer
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