Power lunch with Andrew Sentance

Dr Andrew Sentance clearly relishes the difficult jobs. By day, he's the Chief Economist of British Airways, which of course has been in the thick of it recently. And by night (well, the odd Wednesday at least), he's a member of the Bank of England's Monetary Policy Committee (MPC), in charge of setting interest rates. He came along yesterday to share his thoughts at a Power Lunch here at the Adam Smith Institute.

As usual, the lunch was off the record, though I can reveal that the economists around the table disagreed on pretty much everything, as of course you would expect. But they did seem to agree that the MPC is sailing through relatively uncharted waters. Global forces point as much to inflation as they do to downturn. The financial sector is in crisis but other parts of the economy still seem robust.

Still, after some years of over-easy credit, particularly in the United States, and government profligacy, particularly in the United Kingdom, I reckon it would be daft not to expect some 'adjustment' as economists call it. The interesting question is whether the MPC can manage things so that everyone gets back to normal without going into a blind panic because the value of their home is falling while their mortgage costs are going up. At least the banks are using the MPC's interest rate cuts to strengthen themselves a bit, so while that's no short-term succour to borrowers (or Gordon Brown) in the long run it at least makes further banking panics less likely.

Trouble is, the government share of the economy has been growing fast, while it's the rest of us who have to take the strain of all the past policy mistakes and the current policy prescriptions. Mind you, Andrew and friends wouldn't want life to be easy, would they?

...
written by HJ, April 16, 2008

Eamonn,

Could you explain briefly what company chief economists (or indeed any other economists employed by companies) actually do?

...
written by Blog Administrator, April 16, 2008

HJ – They basically advise the business on the state of the economy and on economic trends that will affect the company.

...
written by HJ, April 16, 2008

Well, thanks for that, but we can all read about the state of the economy and look at the forecasts and trends produced from various sources. You don't need a chief economist for that.

Any half decent marketing person will be looking at the economic, regulatory, demographic and other market trends that are likely to effect future business in order to make decisions about which markets to pursue, etc.. This is fundamental to the business - it's what the management should be doing all the time, not something you leave to someone with the job title 'economist'.

Written by Dr Eamonn Butler
Wednesday, 16 April 2008
Dr Andrew Sentance clearly relishes the difficult jobs. By day, he's the Chief Economist of British Airways, which of course has been in the thick of it recently. And by night (well, the odd Wednesday at least), he's a member of the Bank of England's Monetary Policy Committee (MPC), in charge of setting interest rates. He came along yesterday to share his thoughts at a Power Lunch here at the Adam Smith Institute. As usual, the lunch was off the record, though I can reveal that the economists around the table disagreed on pretty much everything, as of course you would expect. But they did seem to agree that the MPC is sailing through relatively uncharted waters. Global forces point as much to inflation as they do to downturn. The financial sector is in crisis but other parts of the economy still seem robust. Still, after some years of over-easy credit, particularly in the United States, and government profligacy, particularly in the United Kingdom, I reckon it would be daft not to expect some 'adjustment' as economists call it. The interesting question is whether the MPC can manage things so that everyone gets back to normal without going into a blind panic because the value of their home is falling while their mortgage costs are going up. At least the banks are using the MPC's interest rate cuts to strengthen themselves a bit, so while that's no short-term succour to borrowers (or Gordon Brown) in the long run it at least makes further banking panics less likely. Trouble is, the government share of the economy has been growing fast, while it's the rest of us who have to take the strain of all the past policy mistakes and the current policy prescriptions. Mind you, Andrew and friends wouldn't want life to be easy, would they? Bookmark Comments (3) Subscribe to this comment's feed ... written by HJ, April 16, 2008 Eamonn, Could you explain briefly what company chief economists (or indeed any other economists employed by companies) actually do? ... written by Blog Administrator, April 16, 2008 HJ – They basically advise the business on the state of the economy and on economic trends that will affect the company. ... written by HJ, April 16, 2008 Well, thanks for that, but we can all read about the state of the economy and look at the forecasts and trends produced from various sources. You don't need a chief economist for that. Any half decent marketing person will be looking at the economic, regulatory, demographic and other market trends that are likely to effect future business in order to make decisions about which markets to pursue, etc.. This is fundamental to the business - it's what the management should be doing all the time, not something you leave to someone with the job title 'economist'. Write comment This content has been locked. You can no longer post any comment. Powered by Azrul's Jom Comment for Joomla!