Miles insists job guidance works

Tim Wallace
Follow Tim
FIRMS can increase production rapidly when the recovery takes hold without taking on more staff, the Bank of England’s David Miles said yesterday, arguing that markets are wrong to expect unemployment to fall soon.

But this does not mean the policy of waiting for jobs to recover before cutting rates has failed, he said.

“I think there is a rather Alice in Wonderland, upside down logic to this,” Miles said. “It implies that somehow the MPC find unwelcome signs of a recovery in the economy.”