EXCLUSIVE: ‘No North-South divide in economy’

Andrew Haldane of the Bank of England
Andrew Haldane of the Bank of England

The Bank of England’s new chief economist has told The Scarborough News that he does not believe there is a great North/South divide in the economy.

Andrew Haldane gave his first interview in his new role to reporter Carl Gavaghan ahead of his visit to the Scarborough Business Ambassadors Forum at the Spa on Wednesday.

The Leeds-born economist had been on a tour of his home county during the day to judge the mood of businesses in the region.

He said: “Actually speaking to real people, businesses gives us a really important read on how the economy is performing.

“It’s been pretty upbeat I would say, I mean that can’t be said of every business in every sector in every region but when can you say that, but it’s a pretty positive picture.

“We know the wider economy is growing at a fair click, maybe three per cent year on year, which is pretty good going, I’d say what we have heard [in Yorkshire] was consistent with that.”

“I think you could make a case [for a North/South divide] and the numbers will tell you that things are a little bit hotter in parts of the south, you know rates of unemployment are a little bit lower there than they are up here but none the less it terms of the kind of the pace of pick up it’s not too dissimilar actually.

“Think if you look at some of the survey evidence that suggests that consumers, households, have got a spring in their step and that’s true the length and breadth of the country.

“And that’s true on the business side also. I say what we have heard in Yorkshire is pretty much bang in line with that.”

He admitted that interest rates were likely to go up but said the bank would not be rushed into quick rises.

He added: “It’s not that there aren’t pockets of pressures, wages are still quite squeezed for example, we are not in a situation where wage pressures or inflation pressures are tearing away, and that’s a good thing as it would put pressure on us to be raising interest rates quickly and the fact that interest rate pressures are quite subdued means we are not under that pressure, which is quite a happy place to be in.

“Think back three years inflation in this country was quite high, about five per cent and the economy wasn’t growing, fast forward three years we’ve got the economy growing and inflation coming down a lot, that’s a much sunnier environment that one we have seen for at least six years in this country.

“There’s a bit of balancing act going on right now in the economy.

“All else being equal at some point you’d want to start adjusting upwards, when we do that it will be a gradual path and we are not going back to the sort of levels we have had in the past.

“That’s important as if you’re a business thinking about investing you want a degree of assurance that interest rates aren’t going to start increasing rapidly and to high levels, we are saying that’s not the plan and we are going to increase it to a level of rates that you have been used to in the past.”

Mr Haldane did refuse to be drawn into the effect on the local, and national economy, should Scotland vote for independence later this year.
“We are leaving firmly with the politicians,” he laughed.