Michael Saunders the latest member of the Bank of England’s Monetary Policy Committee has suggested that the UK economy is in a stronger position than some economists have suggested. Saunders, who joined the MPC after August’s interest rate cut decision, gave his first comments since becoming a member and suggested wage growth and employment rates might hold the key to future decisions.
Saunders believes that if there was a rise in the jobless figures there would once again be a rate cut, however signs of wage growth would encourage a rate increase. He also mentioned that while short term data has been better than anticipated, the MPC believe the future is inconclusive and they may have to act again with an interest rate cut.
Brexit optimism from the Office for National Statistics
Joe Grice, Chief Economist for the Office for National Statistics stated yesterday what many already believe, that the UK hasn’t been as badly affected as many thought since Brexit. However, Mr Grice did warn that the latest services data which accounts for most of the UK economy was due next week and hadn’t been included in the latest report. The first major comprehensive release of data for the last three months after the Referendum will be available on the 27th October.
Mark Carney to deliver speech in Berlin tonight
Mark Carney (Governor of the Bank of England) is due to make his speech in Berlin tonight. Carney has taken much of the credit for the UK supposedly avoiding a recession, even suggesting the main reason for the UK’s good data is because of the actions taken by the MPC. Normally when the Governor delivers a speech the Pound weakens, but since there has been good news of late for Sterling, this trend might be about to change.