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Home›Trade Remedy›Governor of the Bank of England: UK recovery stabilizes as companies struggle to fill vacancies – Business Live | Business

Governor of the Bank of England: UK recovery stabilizes as companies struggle to fill vacancies – Business Live | Business

By Lisa Small
September 8, 2021
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12:45 p.m. EDT
12:45 p.m.

Bailey: the ping may have slowed the recovery rate

On the outlook for the economy …

Question: The latest retail sales and consumer borrowing data point to a slowdown in spending – are you worried the recovery is faltering due to the persistence of the Delta variant?

Gov. Andrew Bailey says we’re seeing “some flattening of the take-back rate” across a wide range of metrics – he cites mobility data from Google and Apple, and payment data (which was stable at mid-point). August).

The Bank doesn’t have a “precise history” to explain it, but the increase in cases of the Delta variant of Covid-19 may have something to do with it.


Certainly, during the summer, when we entered the “ping” period, it was quite possible.

Bailey then reiterates that the impact of Covid has eased – compared to the early days of the pandemic, when the UK went into lockdown. It is thanks to the vaccination program.


Economies that have a lower vaccination rate and therefore resort to more lockdown procedures because their attenuation for the Delta variant sees their activity weaken further.

This is a problem for the UK, especially if it affects trade with Asia-Pacific countries, he adds.

[China’s factories, for example, fell into contraction in August for the first time in nearly a year and a half].










12:25 EDT
12:25

Professor Silvana Tenreyro raises an important point: there are more than two million more workers unemployed, on leave or economically inactive compared to February 2020.

So there is still capacity in the labor market.










12:14 EDT
12:14

Deputy Governor Ben Broadbent said there has been a big shift in demand for labor during the pandemic – which is why there are a large number of vacancies even though employment in the Kingdom -Uni is lower than before the pandemic.

In some areas the vacancy rate is at record highs, but others appear to have a lot of spare capacity and low vacancy rates.

Because of this, there are “big, big differences in the rate of wage growth,” either between industries or geographically across the country, Broadbent explains.

As these imbalances in the economy were caused by Covid-19, they are expected to dissipate as the pandemic subsides.










12:06 EDT
12:06

Andrew Bailey points out that the Bank’s projection that inflation will return to target will assume “some increase in interest rates”, as financial markets also expect.










12:02 EDT
12:02

Deputy Governor Dave ramsden points out that other central banks have also raised their inflation forecasts, higher, in recent months as the pandemic evolves.

Ramsden adds that he also sees the potential for a more inflationary scenario than the Bank’s central forecast, driven by the tight labor market.










11:53 EDT
11:53

BoE Governor Bailey: Recovery stabilizes amid high vacancies

BoE Governor Andrew Bailey told MPs that the overall economic impact of Covid in the UK has ‘eased’ over time, but is still causing imbalances in demand for goods and services.


For now, we are witnessing a stabilization of the recovery, short-term indicators suggest.

In Asia, however, the appearance of the delta variant affects activity, especially in places with low vaccination rates. There the answer may be to stop the activity.

This accentuates the bottlenecks in the economy, Bailey told the Treasury Committee.

Q: What are the chances that these bottlenecks will last longer than expected?

Bailey says the bank thinks they won’t be persistent.

Historically, commodity prices tend to return to their average levels over time (and they should keep rising ever higher to keep pushing the inflation rate up).

Bottlenecks in the transportation supply chain should resolve themselves.

And global semiconductor sales have increased, suggesting that supply is returning after a recent disruption.

But, Bailey goes on to voice his concerns about the UK job market – and the struggle to fill vacancies amid the supply chain crisis.


We have already spoken in hearings about concerns about rising unemployment. In many ways, the concern now is to fill jobs.

We have a high level of vacancies in this country, obviously it’s in the news every day.

We believe that the end of the leave regime on September 30 should lead to an increase in the supply of labor in the labor markets, so we again believe that it should correct itself, Bailey said.

But Bailey says he personally has “a little more concern” about persistence in the job market.










11:32 EDT
11:32

Bank of England Bailey: imbalance between supply and demand for goods drives up inflation

In parliament, the Treasury Committee questions senior politicians from the Bank of England.

And they kick off the Bank’s latest forecast that inflation could reach 4% by the end of the year, double its target. In May, they predicted the CPI would hit 2.5% by the end of 2021.

Q: Could this undermine confidence in the Bank’s ability to forecast inflation?

According to Governor Andrew Bailey, two factors are driving inflation up:

First, an increase in global demand for goods, pushing up the prices of raw materials, oil, metals and some agricultural prices.

Second, there is an imbalance of goods and services due to the pandemic – especially goods. This creates bottlenecks around the world, driving up the prices of goods.

Bailey also points out that the pandemic continues to affect the global economy.

The persistence of Covid means we haven’t seen the rebalancing in demand between goods and services that the Bank expected to see, he said.

Instead, the demand for goods is always much higher than the supply for goods, which drives up the prices of goods.

Bailey also points to the continuing shortage of semiconductor chips, which has driven UK auto production to its longest low – and pushed up used car prices.

The committee also hears the deputy governors Dave Ramsden and Ben Broadbent, Silvana Tenreyro, external member of the Monetary Policy Committee, and Jonathan Room, external member of the Financial Policy Committee.

Treasury Committee
(@CommonsTreasury)

Our session on @bank of EnglandThe July Financial Stability Report and August Monetary Policy Report begin now.

Watch it live on Parliament TV 👇https://t.co/WHeP1hjGTX


September 8, 2021

Update
at 11:36 a.m. EDT










11:19 a.m. EDT
11:19

In July, there were 8,702,000 unemployed Americans – so today’s JOLTS report shows that there are in fact more vacancies than there are people who could theoretically fill them.

Liz Ann Sonders
(@LizAnnSonders)

More job offers than unemployed in the workforce pic.twitter.com/GSwucUTPzv


September 8, 2021

Charlie bilello
(@charliebilello)

There are now 2.5 million more job openings than the unemployed in America. It’s a new record. pic.twitter.com/zGoMnlDGn2


September 8, 2021

Some people were unable to take work in July due to family responsibilities or fears of catching Covid019 as the delta variant spread across the United States.

The stimulus program that increased unemployment benefits in the pandemic finished earlier this week, which could encourage some workers to find a job this fall.










11:03 EDT
11:03

Stocks have taken a southward turn on Wall Street.

The Nasdaq is now down 1%, losing 150 points from yesterday’s record of around 15,223.

The Dow Jones is also weaker, losing 79 points or 0.23% to 35,020, as concerns about the global recovery weigh on the markets.

BlackCentaurFX
(@BlackCentaurFX)

US stocks hit by NASDAQ lead https://t.co/Gg7SuZ10KT via ForexLive #forex #fx


September 8, 2021



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