LONDON — Prominent strategist Albert Edwards is shocked that Bank of England Chief Economist Andy Haldane is still in his job after comments he made over the summer about investing in the British property market.
Notoriously bearish Edwards delivered a talk on Tuesday as part of his employer Societe Generale’s annual Global Strategy Presentation.
During his speech, Edwards had what he described as “a bit of a rant” about the state of the British housing market, and took aim at Haldane for comments he made during an interview in August.
In that interview, Haldane said that investing in property in the UK right now is a better bet than a pension — an assertion that Edwards described as “grotesque.”
“Andy Haldane, the chief economist of the Bank of England, what an incredible thing he said when he was quoted in the Sunday Times saying ‘property is a better bet than a pension,’ due to continually rising house prices. That is a grotesque thing for a policymaker to say. Quite frankly I’m surprised he’s still in his job after he said that. He shouldn’t be in his job,” Edwards told the audience.
“That reminds me of [former Federal Reserve Chairman] Ben Bernanke in 2006 when he was asked about the house price bubble, he said ‘Hey, I don’t even accept your premise there is a bubble.'” That assertion came around a year before the US sub-prime mortgage market collapsed.
In criticising Haldane on Tuesday, Edwards effectively doubled down on the comments he made about Haldane in one of his weekly research releases last year.
“Little surprises me in this business any more, but I was stunned that Bank of England Chief Economist Andrew Haldane could state that property is likely to be a better investment than pensions,” Edwards wrote in a note in September 2016. He called Haldane’s comments “palpable nonsense,” and a “totally stupid thing to say.”
Edwards ire at the time — and this week — refers to an interview with Haldane in the Sunday Times at the end of August, in which the Monetary Policy Committee member said: “It ought to be pension but it’s almost certainly property,” when answering a question about preparing for retirement.
“As long as we continue not to build anything like as many houses in this country as we need to… we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north,” Haldane said.
Edwards’ basic argument is that he does not believe the UK housing market is being impacted by a lack of housing, but rather by a big imbalance in supply and demand, and by the issue of foreign owners who buy properties and leave them unoccupied, distorting the market.
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