Wednesday, January 27, 2010
Bank's Sentance on growth and housing
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

An interesting speech, here, from Andrew Sentance, a member of the Bank of England's monetary policy committee. He thinks the private sector in the UK is resilient enough to be able to grow through a period of public sector cutbacks, and likens the current period to the recovery from the recession of the early 1990s, when it took time for growth to get properly growing.

The housing market, on the other hand, is more likely to be like that of the early 1980s, when there was no supply overhang and demand and activity recovered as the economy pulled out of recession. As for interest rates, the sense from the speech is that nothing will be happening for a while but then it will be the balance between the impact of fiscal tightening and the upward pull on inflation from economic expansion that determines where rates are heading.