Talking about the economy, Bank of England chief economist Andy Haldane said that it “appears to be writhing in both agony and ecstasy,” a way too intimate mental image from a central banker on a Friday morning.
He’s blaming a slowdown in global growth, more international political tension, and the failure of wage growth to return to the British economy, despite the fastest drop in unemployment in modern history.
The phrase applies just as much to the US: the equity selloff and falling bond yields of recent days are happening despite a fairly solid economic performance, at least in comparison to recent years.
“Put in rather plainer English, I am gloomier,” Haldane added. Like Fed policymaker James Bullard yesterday, Haldane now sees the possibility that loose monetary policy could continue for longer, adding: “interest rates could remain lower for longer, certainly than I had expected three months ago.”
That’s a fairly bold comment from someone in a high position at the Bank. Until pretty recently, some analysts had expected an interest rate hike in the UK as soon as November. It now looks like central banks across the world are rushing to backpedal, and promise low rates for longer.