BoE’s Haldane says his rate hike vote should not be a…

By David Milliken

LONDON, June 28 (Reuters) – Bank of England Chief Economist Andy Haldane said on Thursday his unexpected vote to raise interest rates this month should not be considered “surprising or radical” after a decade of ultra-loose monetary policy.

Earlier this month, investors were taken aback when Haldane joined a minority of officials calling for an immediate rise in rates, boosting the chances of a hike in August.

Haldane said he saw mounting pay pressures and added that he would have voted to raise rates from 0.5 percent in May, had data on the economy held firm.

“Some context is important here. Voting for a 25 basis-point rate rise, a full decade after monetary policy was first placed on an emergency setting, is hardly either surprising or radical,” Haldane said in a speech to the Academy of Social Sciences in London.

Haldane said there would always be some data that disappoints.

“But waiting for something to turn up is not a prudent strategy in life. And waiting for everything to turn up is certainly not a prudent strategy for monetary policy,” he said.

Most of Haldane’s speech focused on fixing Britain’s abysmal record of productivity growth over the last 10 years.

He said Britain’s institutions should focus more on how to “trickle-down” new technology to the swathes of the economy that have shown only weak growth in productivity. (Writing by Andy Bruce; editing by Stephen Addison)