Who will Rachel Reeves choose to replace Jonathan Haskel on the BoE's MPC?

Views From the Marsh - David Owen

Monday brings a keynote speech by the MPC’s Jonathan Haskel, at Kings College London, in his last few weeks on the MPC. Using a newly constructed dataset, he will contrast our current experience to that of the 1970s. “What caused the pandemic-era inflation spike in the UK? Looking ahead, he will reflect on the challenges of making policy in real-time, and the outlook for wage growth and inflation”.

Wind back the clock to when he joined the MPC six years ago, and we knew he would be very data focused, given his interest in analyzing the growing importance of the so-called intangible economy, including intellectual property, branding, design, software and the creative industries. Things which you cannot necessarily see or touch, but make up much of the activity and growth in a modern economy.

It will be very interesting what he has to say, especially given he seemed to be in a minority on the MPC to recognize that the economy could be going through a regime change as the UK came off furlough, and that inflationary pressures were becoming more entrenched.

It will be important who Rachel Reeves replaces him with when he leaves the MPC at the end of August, following the publication of the next Monetary Policy Report and next monetary policy decision (1 August).

In the interim, Q2 producer price service data is published on the 17th, alongside June’s CPI, followed by the labour market statistics on the 18th (including payroll data for June, giving us 3 months of data since the National Living Wage was increased on 1 April). And, of course May’s GDP print on the 11th.

Amongst everything else that was happening on Friday, the BoE published the result of its latest Decision Maker Panel of CFOs (survey dates, 7 and 21 June with 2,208 responses). This we find much more useful than the BoE’s survey of market participants, who we suspect have a bias (both business and perhaps personal) to expect, or hope for, significant rate cuts.

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