Friday, 3 February 2017

Bank of England mis-estimates spending buoyancy

(Yesterday   tweeted misestimated the buoyancy of consumer spending. Perhaps they overestimated the amount of gloom caused by Brexit vote. Ha ha.)

Yesterday (2017/2/2) the Monetary Policy Committee revised its estimates for both monetary growth and wage inflation downward, admitting that its November estimates misread the future in two (compensating) ways: Wages were not rising as fast as expected, and consumer spending had not fallen as expected [1]. 
Mark Carney, at his press conference, made several suggestions as to wages: perhaps increased population, or changes to taxes.
I make here one suggestion as to buoyant spending. The Monetary Policy Committee probably thought everyone in Britain would all be as shocked as it was at the vote to leave the European Union. But they overlooked that fact that a majority of the country actually welcomed the idea of "taking back our sovereignty", and doubtless found in Brexit a harbinger of good times ahead.  
(Haha ! They keep catching us out.)

[1] http://www.bbc.co.uk/news/business-35493474

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