• Save
Ben Broadbent's presentation at London Business School
Upcoming SlideShare
Loading in...5
×
 

Ben Broadbent's presentation at London Business School

on

  • 914 views

Ben Broadbent, MPC member of the Bank of England, was the guest speaker of a Finance Club event held at London Business School on 23 September 2013. Here are the slides to his presentation on forward ...

Ben Broadbent, MPC member of the Bank of England, was the guest speaker of a Finance Club event held at London Business School on 23 September 2013. Here are the slides to his presentation on forward guidance.

Statistics

Views

Total Views
914
Views on SlideShare
900
Embed Views
14

Actions

Likes
0
Downloads
0
Comments
0

1 Embed 14

https://twitter.com 14

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Ben Broadbent's presentation at London Business School Ben Broadbent's presentation at London Business School Presentation Transcript

  • Ben Broadbent External MPC member 23 September 2013 London Business School, Regents Park Conditional guidance as a response to supply uncertainty
  • Surveys suggest significant pick-up in growth Source: ONS, CBI, Markit Economics, Bank calculations (a) Weighted average of the Markit/CIPS PMIs and the CBI Distribution Trades surveys. 1997 1999 2001 2003 2005 2007 2009 2011 2013 -9 -7 -5 -3 -1 1 3 5 7 38 43 48 53 58 63 % Combined CIPS & CBI Dist. Trades (LHS, lagged 1Q) Marketsector GDP growth (RHS) (a)
  • Source: SNL Financial, Datastream and Bank calculations. (a) CDS spreads of banks weighted by assets as of end 2012. 0 50 100 150 200 250 300 350 400 2008 2009 2010 2011 2012 2013 bpsUK US Euroarea Follows large drop in banks’ funding costs through second half of 2012(a)
  • Source: ONS, CBI, Markit Economics, Bank calculations Productivity unusually weak even allowing for scale of downturn
  • Source: ONS and Bank calculations (a) Covers the entire population (~2m per year) of UK private non-financial companies, excluding those in the agriculture, mining and utilities sectors. Decomposition methodology is based on Baily, Bartelsman and Haltiwanger (2001). See Barnett, Barriel, Chiu and Franklin (2013), Bank of England Working Paper, forthcoming. (b)This work contains statistical data from the ONS, which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research data sets that may not exactly reproduce National Statistics aggregates. Productivity growth involves significant reallocation across firms(a)(b)
  • Source: ONS, EU KLEMS and Bank calculations (a) Size-weighted variance of real prices, relative to pre-crisis trends, across 29 sectors. See appendix for details Significant increase in price dispersion(a)
  • Source: Bank of England (a) “-“ indicates periods during which data were not available.. Q: Did investment respond positively to rates of return? Pre-crisis 2007 recession 1980’s & 1990’s recession UK Firm-level ONS Annual Business Survey Yes No -(a) Thomson Reuters WorldScope Yes No -(a) Industry-level ONS sectoral data Yes No Yes US Industry-level EU KLEMS sectoral data Yes Yes Yes Unlike in US, UK investment less sensitive to profitability than in earlier recessions
  • Source: REC employment survey and Bank calculations (a) Employee growth for Q3 2013 approximated by that between April and July. 30 35 40 45 50 55 60 65 70 75 -4 -3 -2 -1 0 1 2 3 4 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ONS privatesector employee growth REC (lagged 3 quarters) %, yoy(a) Surveys suggest private-sector employment will continue to grow for a while yet
  • Source: ONS and Bank calculations (a) Includes government supported training schemes and unpaid family workers . (b) Year to May-July 2013. -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2000-07 2007-09 2009-12 2012-13 Annual avg change inU (%) Gen. Government Privatesector Changein workforce Actual (a) (b) Contributions to changes in unemployment rate
  • Source: HMT (a) Forecasts taken from June and July of each year for GDP and employment growth in the following calendar year. Blues dots are forecasts made for calendar years 2004-07; red dots for 2010-12. Professional forecasters’ forecasts of GDP and employment growth pre- and post-crisis(a)
  • Source: ONS, CBI, Markit Economics, Bank calculations (a) Average MPC vote calculated as the average voting result on Bank Rate and QE, with every extra £25bn of QE treated as if cutting Bank Rate by 25bps. See Joyce, Tong and Woods (2011). 1998 2000 2002 2004 2006 2008 2010 2012 -100 -80 -60 -40 -20 0 20 35 40 45 50 55 60 bpsCombined CIPS & CBI Dist. Trades (LHS) AverageMPC vote(Bank Rate only) AverageMPCvote(including QE) Average MPC votes against composite PMI indicator(a)
  • Source: Own calculation (see Appendix) 0 0.3 0.6 0.9 0 0.5 1 1.5 2 2.5 Unemployment Output Standard deviation of supply relative to that of demand Weights in optimal estimate of output gap Greater uncertainty about supply means unemployment a more valuable indicator for policy, output growth less so
  • Ben Broadbent External MPC member 23 September 2013 London Business School, Regents Park Conditional guidance as a response to supply uncertainty