UK productivity is dire, and will not improve on the basis of the paltry sums to be spent on training mentioned yesterday, welcome as such pittances are. In that case growth is not going to happen, and any inflation there is arises purely from exchange rate shocks, which cannot be addressed or corrected by Bank of England action. So, to put it another way, interest rate rises should be off the Bank of England agenda for a very long time to come.
1) The idea that productivity is something determined by government spending.
2) The idea that interest rates and monetary policy do not influence the exchange rate and thus cannot influence inflation caused by the exchange rate.
It’s worth our recalling that this man is employed to teach economics in a British university.