Not that he quite realises he’s saying this but still:
From this, he concluded:
Public expectations of inflation have a better explanatory power than the Bank’s own forecasts in dictating UK inflation movements. This is clearly a problem for the Bank’s policymakers, whose forecasts are (supposed to be) more sophisticated than those formed by the public.
To put it another way, walk about and talk to people to find out what is going on. That, when it comes to economic forecasting, is much more important than anything that the Bank of England does by sitting in it ivory tower with all its financial models.
The reality is that people make up the economy, and not finance.
Will the BoE listen? I doubt it.
That is the insistence that the people, in aggregate, know more than the bureaucrats, politicians and planners. Which is true of course.
It also entirely buggers everything else Spud ever says about the economy.