BOE’s Bailey on Inflation, Balance Sheet, Labor Market

The video discusses the economic recovery post-COVID, emphasizing the reduced impact of successive waves on economic activity. It outlines the strategy for unwinding the balance sheet, aiming for predictability to avoid market turbulence. The discussion includes an analysis of pricing and inflation trends, highlighting the temporary nature of inflation spikes. The impact of the furlough scheme on the labor market is examined, along with the potential for increased education participation. Finally, the video touches on the bank bonus cap post-Brexit, noting no current plans for its removal.

What has been the trend in the economic impact of COVID over time?

• It has increased significantly.

• It has fluctuated unpredictably.

• It has remained the same.

• It has reduced over time.

What is the initial step in the process of unwinding the balance sheet?

• Reducing transparency in the process.

• Selling all gilts immediately.

• Ceasing to reinvest as gilts mature.

• Increasing active sales.

Why is the approach to unwinding the balance sheet considered sensible?

• It ignores market conditions.

• It involves selling the entire stock.

• It is gradual and transparent.

• It is unpredictable and rapid.

What is the expected nature of the current inflation spike?

• Non-existent.

• Permanent and increasing.

• Temporary and consistent.

• Unpredictable and erratic.

What is a key concern regarding inflation expectations?

• They could lead to sustained inflation if not monitored.

• They are irrelevant to monetary policy.

• They are always accurate.

• They have no impact on the economy.

When is more information expected on the impact of the furlough scheme?

• It is already complete.

• In the next five years.

• By the end of this year.

• By the end of next year.

What is the current stance on the bank bonus cap post-Brexit?

• It is being actively reviewed.

• There is no current plan to remove it.

• It has been removed.

• It is the top priority.