A new report from Neil Prothero, UK analyst at author of the Economist Intelligent Unit report “The end isn’t nigh: central bank challenges as the era of cheap money enters a new phase” suggests that easy money is not on the way out. In fact, ultra accommodative policy could hang around for quite some time.
Reminder: Mr Carney's actual experience w/ implementing unorthodox monetary policy outside of (v vague) rates guidance is precisely zip!— econhedge (@econhedge) July 1, 2013
Prothero's analysis finds that the impact of the ultra-loose, unorthodox policies have had limited impact on the UK's real economy.
Released on the day of Mark Carney's arrival as governor at the Bank of England, Prothero says that the Canadian is unlikely to prompt refinement of the current policies but will lack the tools to allow the economy to reach "escape velocity".
It is all but certain that Mr Carney will start his tenure with a concerted attempt to bolster economic activity, but there is little he can do about the UK's weak fundamentals and the continuing effects of fiscal austerity, which will weigh on growth for a long time.
But we may have to wait some time to see what Carney has to say for quite some time:
Carney's first official speech as BoE governor appears to be on 28 Aug: http://t.co/H0Kn5nlrAj— Yogesh Chandarana (@Yogi_Chan) July 1, 2013
MArk Carney chairs the Bank of England Monetary Policy Committee pre meeting: pic.twitter.com/AXPEeSK4C8— Faisal Islam (@faisalislam) July 1, 2013