BoE's Haskel: Rate cuts will not happen 'anytime soon'
The Bank of England's Jonathan Haskel (pictured). Credit: World Economic Forum/Jakob Polacsek
In a speech yesterday (28 November), the member of the Bank's Monetary Policy Committee since 2018 said interest rates need to be «held higher and longer than many are expecting,» as productivity growth remained «in the doldrums».
«The labour market is still historically tight. At current rates of change, it would take at least a year to fall back to average pre-pandemic tightness,» he said.
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Haskel is seen as one of the MPC's most hawkish members, having been one of only three members to vote for a 50 basis point rise in August and one of three to vote for a 25 basis point rise earlier this month.
As part of his speech, he presented new research which revealed how the energy shocks and pandemic had altered the UK labour market, making it less efficient at filling vacancies.
«The matching efficiency of the labour market appears to have been impaired since the pandemic, ‘tightening' the labour market,» he said.
He noted that food shocks seemed to be more persistent than other shocks, with the impact lasting at least four years, compared to energy shocks which start to fall after about five quarters.
Food prices also continue to be the second largest contributor to ongoing price rises, and have been for the last four quarters, he said.
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In the speech, Haskel also argued it was untrue that the Bank of England was wrong to treat rising inflation during the recovery from the pandemic over 2021 as transitory.
«Since the initial burst of inflation during the spring and summer of 2021 was from energy prices and shortages,
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