LONDON, Nov 18 (Reuters) - Bank of England Deputy Governor Ben Broadbent delivered a speech at a Reuters Newsmaker event on Wednesday. Here are some highlights from his answers to questions from audience members:
For the Reuters story on his speech, see:
“I have long felt that coverage, not just of the last inflation report but of lots of things we communicate can tend to slip sometimes into interpreting what we say as unconditional promises.”
“November’s (quarterly economic outlook) in particular.... I do think that some of the coverage which essentially, some which went along the lines of saying bankers said interest rates won’t go up til X, was just misplaced.”
OVER-FIXATION ON “LIFT-OFF” DATE
“I think it is a particular danger, partly because the yield curve is so flat, in looking at that lift off date and I remember when I was in my last job, people used to, the bank didn’t publish the numbers behind the forecast.”
“We’ve been waiting for on the supply side of our economy, growth to move away from reductions in slacks and falls in unemployment to productivity growth. That may have started to happen.
“And I don’t think that has changed really in the last two or three months in a big way so that picture is still there.”
“What’s happened of course over the past year, and the big thing that has happened is the big fall in commodity prices. And that in a sense I think has bought more time for the committee to think about these things.” GLOBAL GROWTH, U.S. RECOVERY “NOT THAT STRONG”
“We’ve seen solid recovery in domestic demand in both consumption and investment against a backdrop of weaker global growth. That global picture is nuanced because recently our single biggest trading partner the eurozone has started to grow and that’s certainly very different from when I first joined the committee obviously. But at the same time the U.S. recovery is not that strong.
“It has like us seen a big fall in unemployment but underlying productivity growth has been quite weak.”
“I think it’s of some concern, but my own view is that monetary policy, while it can have some effect on these things ... is not the best instrument to deal with them. My own view is that’s likely to get better than worse.”
“To my mind we should be humbled by the financial crisis and less knowledgeable about these precise orders of magnitude. The idea that I would know to within 12-1/2 basis points — I don’t see particular virtue in that.” ECONOMIC EFFECT OF PARIS ATTACKS
“Economically the main effect is via what it does to confidence, risk appetite and the premium hurdle rate demanded of risky investments including in real productive capital in the economy, and as you say, regrettably this is not the first such attack.
“And indeed those fears or nervousness about the future has been apparent I would say in the mix of asset prices we have been facing.
“And with equity yields generally still reasonable levels and these very low bond yields, that has been a feature of the world for a very long time including in the UK, and who knows maybe that’s one of the reasons why we’ve had this mix and why investment has been weak.”
Reporting by UK Bureau, compiled by Andy Bruce; Editing by Toby Chopra