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Haldane explains why the UK economy has been worse than other countries.
We’ve seen many businesses faltering that have managed to weather Covid and the cost of living but are vulnerable to possible shocks.
Think of it as a weakening of society’s immune system. We have exhausted our defenses, which makes us particularly vulnerable.
From Covid to the cost of living, the shocks we’ve recently experienced seem global, but the UK always seems to be disproportionately coping with the aftermath in terms of income and livelihood hits. . Whether it’s health, education or charity, we’re not investing enough in the system.
Introduction: Former Bank of England chief economist warns ‘more pain is coming’ from rising mortgage costs and falling real wages
Good morning. Welcome to our rolling coverage of business, financial markets and the global economy.
Andy HoldenThe former chief economist at the Bank of England, now chief executive of the Royal Society of Arts and a government adviser on leveling up, said real wages will fall again this year as mortgage costs continue to rise. He also warned that recent political turmoil has contributed to the UK’s poor economic performance. , and said it had seen an “economic flicker.”
Speaking on BBC Radio 4’s Today programme, Holden argued that the UK economy was less resilient to the economic crisis due to underinvestment and lack of coordination between the public, private and charitable sectors.
The horrific double-hit of the initial Covid and subsequent cost of living crisis has created tremendous financial stress for many businesses, many homes and, of course, many charities.
In terms of inflation-adjusted wage growth, there have been 15 lost years. Last year saw a decline in real wages, but the same thing is most likely to happen again, putting severe economic and indeed psychological stress on so many households. ‘I’ve seen it.
Asked if political instability has contributed to the recent economic downturn in the UK, he said:
With a ministerial merry-go-round, it is more likely that measures will not be implemented and working programs will not be expanded. We are still a little short of making a medium-term plan for the growth of this country.
He was asked if he had any regrets because the Bank of England had raised interest rates at the same time as massive energy price hikes and inflation had occurred:
It’s been painful and I’m afraid there will be more pain coming as the rise in mortgage rates from last year will start hitting people’s bank accounts later this year. would have liked the central bank to start raising rates a little sooner. would have been Overall, however, this global shock has always caused considerable pain, including at higher rates.
With headline inflation now at its peak, we hope there’s a good chance the central bank will slow down a bit later this year and put less brakes on the recovery. Some glimmers in economic life.
The Bank of Canada announced yesterday that it will pause after its eighth rate hike to 4.5%.
Today’s market focus is on US GDP data Economic growth is expected to slow to 2.6% in the fourth quarter from 3.2% in the previous quarter.
asian stocks MSCI’s broadest index of Asia-Pacific stocks ex-Japan hit a seven-month high as it rose 0.9% for a fifth day after falling again. Trading was thin, however, as Australia closed for a holiday and parts of Asia, including China, still celebrated the Lunar New Year. european market Expected to open higher than US GDP.
agenda
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9am GMT: Italian Business and Consumer Confidence for January
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11am GMT: UK CBI Retail Sales Survey for January
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1.30pm GMT: US Q4 GDP (Forecast: 2.6%, Previous: 3.2%)
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1:30 PM GMT: December US Durable Goods Orders
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1:30 PM GMT: U.S. weekly unemployment claims
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