BoE Base Rate, What if...

[anonymous-user]

speedy_thrills said:

QE seems to be over anyway, negative rates sort of work but it squeezes banks badly.

QE still going strong; ECB still doing 80bn a month and BoJ 80tr a year... QE also hurts bank revenues by killing their net interest margins. FWIW I don't think the negative rate experiment has much legs, it's gone no where.

speedy_thrills said:

That is always what puzzles me, why are measures like productivity and wage growth so poor? Companies have adopted technology, recruited professional managers, hired a plethora of consultants, hired staff and fired staff, tried to grow business within their areas of expertise, tried entrepreneurial approaches to produce new products, tried to consolidate their businesses, tried to financially engineer success, tried to get people to work from home, tried to get people to enjoy being in the office more, tried to get rid of offices, asked people to retire early and tried to allow people to work beyond normal retirement age. Result: No growth. Whenever I think about what is going on in companies this is the stumbling block to my thinking. It's difficult for me to pinpoint why we are here and why there is so little progress on this issue but clearly there is actually something we're overlooking.

It's an excellent point. My theory is that all those measures have greatly increased productivity but at the expense of productive employment. Ie a company now produces the same amount of stuff with fewer people than before. At the same time there are far more poeple now employed in non-productive rolls both for 'service' companies and government ensuring and enforcing regulatory compliance etc... basically producing paperwork no one will ever look at. IMO you also have to take productivity numbers with a huge pinch of salt; I adore the French way of life for example but to suggest they are more 'productive' than the UK is simply unfathomable.