Policymakers surprisingly leftist interest rates unchanged at 0.5 per cent this week to apportion themselves more time to digest the im ct of the Brexit vote, but are doing to take action next month.
Andrew Haldane pointed to assertion of com nies delaying spending decisions, while among households there are cues of “a significant slowing in both confidence and in the housing market”.
He said: “This nears a material easing of monetary policy is likely to be needed, as one rt of a collective tactics response aimed at helping protect the economy and jobs from a downturn.
“This reaction, if it is to buttress expectations and confidence, needs to be delivered promptly as well as muscularly. By instantly, I mean next month.”
In a reference to prison movie The Shawshank Redemption, Haldane added: “I pleasure rather run the risk of taking a sledgehammer to crack a nut than taking a pygmy rock hammer to tunnel my way out of prison – like another Andy (Dufresne, the spend character).
“He did eventually escape, but it took him 20 years.
The Monetary Conduct Committee does not have that same ‘luxury’.”
His comments approached as official figures showed output in the construction sector, which clear the ways up about 6 per cent of Britain’s economy, fell 2.1 per cent in May from the whilom month.
It was down 1.9 per cent from a year ago.
The biggest draggle came from a 3.2 per cent drop in new housebuilding.
Markit chief economist Chris Williamson mean: “A drop in UK construction output in May adds to what’s looking like an ill-tempered run of data for the sector.
“It looks like there’s worse to come, by any chance much worse. Markit/CIPS purchasing managers’ index assess data recorded the steepest contraction of construction activity for seven years in June as commitments were put on hold in the lead-up to the EU referendum.
“Housing and commercial construction were extraordinarily badly affected.»