BOE’s Ramsden: MPC views weakness and uncertainty of UK productivity as a key consideration for monetary policy

BOE’s Dave Ramsden speaking in Cambridge

Pace of productivity influences what happens to inflation
Most recent data show signs of productivity growth rising in the second half of 2017
Still no confirmation that productivity pickup is sustained in the near-term
UK business investment has been unusually weak relative to past recoveries
MPC’s judgement is that productivity growth will settle at just over 1% over the next three years
MPC’s view is that the economy’s speed limit is likely to be around 1½%
There are significant risks in both directions to the outlook for productivity
Naturally lower productivity growth, and dampening effect of Brexit are risks to productivity
A clearer transition path and future trading arrangements post-Brexit, could reduce uncertainty
Latest evidence from Bank’s Decision Maker Panel Survey suggests impact of Brexit holding back business investment growth may be less in 2018 than 2017

Nothing outside of the box from Ramsden. GBPUSD has continued to recover from the earlier blip. 1.3979 trading.

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