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| Monetary policy 'only short-term balm for UK economy' Monetary policy 'only short-term balm for UK economy' | |
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| Monetary policy can only offer a “short-term balm” for the uncertainty facing Britain’s economy following the vote to leave the EU, the Bank of England’s has chief economist said. | Monetary policy can only offer a “short-term balm” for the uncertainty facing Britain’s economy following the vote to leave the EU, the Bank of England’s has chief economist said. |
| Andy Haldane said the monetary policy committee was under no illusions that it could fully insulate Britain from the long-term effects of June’s Brexit vote, in an opinion piece published in the Sunday Times newspaper. | Andy Haldane said the monetary policy committee was under no illusions that it could fully insulate Britain from the long-term effects of June’s Brexit vote, in an opinion piece published in the Sunday Times newspaper. |
| His comments chime with a consensus among economists that Britain’s government will need to unveil a new fiscal plan in the autumn to keep the economy on an even keel as it prepares to leave the EU. | His comments chime with a consensus among economists that Britain’s government will need to unveil a new fiscal plan in the autumn to keep the economy on an even keel as it prepares to leave the EU. |
| “This is a structural shift in the UK’s economic and trading regime, whereas monetary policy can offer no more than a short-term balm for economic uncertainty,” Haldane said, adding that the result had thrown up a “dust cloud” of doubt in the economy. | “This is a structural shift in the UK’s economic and trading regime, whereas monetary policy can offer no more than a short-term balm for economic uncertainty,” Haldane said, adding that the result had thrown up a “dust cloud” of doubt in the economy. |
| “More fundamentally, [monetary policy] cannot close other structural faultlines across the UK economy – for example, regional, socio-economic, inter-generational and housing faultlines,” he wrote. | “More fundamentally, [monetary policy] cannot close other structural faultlines across the UK economy – for example, regional, socio-economic, inter-generational and housing faultlines,” he wrote. |
| More than two-thirds of economists Reuters polled last week said they expected the government to launch a significant fiscal stimulus to buttress the economy. | More than two-thirds of economists Reuters polled last week said they expected the government to launch a significant fiscal stimulus to buttress the economy. |
| There have been patchy signs that consumer spending has remained robust since the vote to leave the EU, but business surveys point to the worst slowdown in corporate activity since the 2008 to 2009 recession. | There have been patchy signs that consumer spending has remained robust since the vote to leave the EU, but business surveys point to the worst slowdown in corporate activity since the 2008 to 2009 recession. |
| Earlier this month, the Bank of England cut interest rates to a new record low of 0.25% and restarted its bond purchase programme in response to signs Britain’s economy has slowed since the vote to leave the EU. | Earlier this month, the Bank of England cut interest rates to a new record low of 0.25% and restarted its bond purchase programme in response to signs Britain’s economy has slowed since the vote to leave the EU. |