Delivering a speech yesterday in Bradford Andy Haldane, the chief economist for the Bank of England believes we should withdraw from our post-Brexit vote monetary stimulus “later in the year”, as the divisions among the central bank’s monetary policymakers become starker.
Haldane believes the Bank is running the risk of delaying too long in raising interest rates, and said a hike “relatively soon” is necessary. Following the comments, the Pound rose sharply against the US dollar during a volatile trading session.
Haldane added that he strongly considered a vote for higher rates at last week’s monetary policy committee meeting, but judged the risks from a slowing economy amid slow wage growth were too great. Haldane indicated it was the “dust-cloud of uncertainty” thrown up by the shock General Election result, which saw the Conservative party losing its majority.
Yesterday we also had the Queens speech which was meant to be Theresa May's political coronation, but in reality confirmed her fall from grace. Plans to scrap the winter fuel allowance for well-off pensioners, end automatic 2.5% pension rises, expand grammar schools and end free school lunches for all infants have been dropped.
The Queen confirmed that Theresa May's government has shown no signs of budging on its commitment to slash net migration to the tens of thousands. Notably May heads to Brussels today where she is expected to offer to protect the rights of European nationals as part of Brexit negotiations.
13:30 – USD – Unemployment claims are expected to increase to 241k