The ASI's Head of Policy, Ben Southwood, was featured in a City AM article, critiquing comments made by the Bank of England Deputy governor at the North East Chamber of Commerce regarding low interest rates.
Read the article here.
Ben said: “It shouldn't be much of a surprise to Charlie Bean that depreciation in Sterling has failed to have much of an effect on UK exports—given that it has been mirrored by inflation in the UK, even if this inflation has taken longer, since prices in the real economy can lag behind fast-moving financial market prices.
“Between Jan 2007 and Jan 2014 the RPI index increased 25.3 per cent, with much of that increase coming 2009-2011. We shouldn't reason from a price change alone—a monetary policy-driven change in exchange rates does not change terms of trade.”