that is because, as the mpc has previously emphasised, the mpc has previously emphasised, the processinning to affect potential supply in the uk. brexit related uncertainties are causing some companies to delay decisions about building capacity and entering new markets, and the uk ‘s eventual new markets, and the uk ‘s eventual new trading arrangements will require a period of fully allocation in some sectors of the economies expand and others contract. moreover, prolonged low investment will restrain growth in the capital stock and increases in productivity. indeed, if the mpc ‘s current forecast comes to pass the level of investment in twenty20 is expected to be 20 percentage points below the level which the mpc had projected just before the referendum. as a result, the supply capacity of the economy is likely to expand in only modest rate throughout the forecast period. that means only a modest u pta ke period. that means only a modest uptake in demand growth from current sluggish rates will be sufficient to reduce and eventually eliminate slack. the mpc ‘s dream it specifies that

this is because as the mpc has previously empathised, the mpc has previously empathised, the processa period of reallocation as some sectors of the economy expand under this contract. moreover, prolonged low investment will restrain growth in the capital stock and increases in productivity. indeed, if the mpc ‘s current forecast comes to pass, the level of investment in twenty20 is expected to be 20 percentage points below the level which the mpc had projected just before the referendum. as a result, the supply capacity of the economy is likely to expand that only modest rates throughout the forecast period. that means only a modest uptake in demand growth from current sluggish rates will be sufficient to reduce and eventually eliminate slack. the mpc ‘s dream it specifies that in exceptional circumstances the committee must balance any trade—off between the speed at which it intends to return inflation sustainably to target and the support that monetary policy provides twojobs the support that monetary policy provides two jobs and activity. through most of the forecast period the ec

that is because as the mpc has previously emphasised, the mpc has previously emphasised, the processausing some countries to delay decisions about entering new markets. the uk's eventual new trading arrangements will require a period of reallocation as some sectors of the economy expands and others contract. moreover, prolonged low investment will restrain growth in capital stock and increases in productivity. indeed, if the mpc‘s current forecast comes to pass, the level of investment in 2020 is expected to be 20 percentage points below the level that mpc had projected just before the referendum. as a result, the supply capacity of the economy is likely to expand that only modest rates throughout the forecast period. that means only a modest uptake in demand growth. ‘s sluggish rate will be sufficient to reduce and eventually eliminate slack. the mpc‘s remit specifies that in exceptional circumstances, the committee must balance any trade—off between the speed at which it intends to return inflation to target and providing help to jobs and activity. for most of the forecast period,

they have to coordinate but the mpc has to look through that. happy to comment on the way to stop, i have written endless things saying the mpc forecast of wages has been a disaster, wade growth -- they say will be four and it is two. and they have to lower expectations. these things work and conflict and rate rises are off the table for the foreseeable future i see. jonathan: a credibility issue. up, andwrap things ideas exchange on bloomberg, for a lot of people coming forward and talking about the prospect of tighter monetary policy of the bank of england, from the conversation you had, going forward, listening to our guests, are the voices going to die out in terms of the guys in front of us talking about the prospect of tighter monetary policy of the back of it went, or is the debate here to stay? >> i do not think most people in the market believe the bank of england will be raising anytime soon. house believes we right have bitten a read -- have gotten a rate rise and we will get one intimately. -- surrounding the ability of the bank to f

everyone has been warning about rises in inflation, and members of the bank of england, mpc, they areme when the consumer is quite vulnerable. we are very dependent upon consumers. and very high levels of debt. i don't think it is half as positive. is it your view that there is a groupthink, a confirmation bias, some kind of cognitive process that is gripping the economic establishment and the bank of england in particular? economics has been gripped by groupthink for ages, i remember when i said the lawson boom was going to become a bust, i was told i was wrong, i was told i was wrong that if we left the erf it is a good thing. there is groupthink. today what is interesting, over and above groupthink, something anne touched upon, it is about longer term deep—rooted structural problems. what was underlying the bank's pessimism was not brexit, it was a lack of investment and low productivity. add brexit to that, add lack of planning, a government that is paranoid, and... they certainly should plan more, no doubt. do you buy this figure, in 2020, 20% lower investment, than there would b

the rest of the mpc, they are saying we have this big uncertainty and we do not know how it will affectest to stay on hold. mark: there you go. david powell, chief eurozone economist for bloomberg intelligence. in the first check word news. here is courtney donohoe. courtney: of the energy department has responded to tropical storm harvey's disruption and authorized the relief of half a million dollar -- half a billion barrels of oil . almost a quarter of u.s. oil refining. u.s. consumer spending rose by less than expected last month. revision toward june purchases and rising incomes put the economy unstable footing. it makes up about 70% of the u.s. economy. a show of force over south korea. over northn -- korea. -- u.s. and south korea joined together and had position strikes. called. pacific command it a direct response to north korea to launch. china has announced a start today for the communist party reshuffle. the 2300 delegates will gather on october 18 and president xi jinping will have the ability to reshuffle and as many as five of the seven officials could be replaced. global

on balance there's no need for the mpc to be raising rates. >> james, the debate has been picking upr the last true mon few months who has the better attractively market, the u.s. or europe tell the us how you see things from your side of the aisle. >> i'm a uk investor, i'm a uk equity investor, i will be talking my own story i look at the uk market, it loolook looks cheap to me. 4 % yield on the uk, dividend yield. when you look at cash yielding effectively zero, bond yields around 1, getting a 4 % income off uk looks attractive to me. don't forget the uk equity market is 70% overseas the majority of our earnings come from the global economy, including the u.s., europe and the far east we have that exposure to the overseas international growth. at the same time we're paying very little for it if you adjust the ratio, it looks cheap, 15% cheap to the long-term average. it's a great combination exposure to the growing international economy at a cheap valuation. i like and i'm a passionate porter for uk equity for investors. >> the ftse 100 just hit another all time high. do you think

page 2 and don, i think it was probably in economics one that i learned that lower incomes have larger mpc, a lot higher marginal propensity to consume and you look at those numbers and all of the basics that lower income individuals have to buy in order to survive, a really tax regulated and governed much more highly in that income category than it is for those of us who are fortunate enough to have done better and moved up the income pattern. so this really is a problem of both dealing with big government, intrusive government and how it adversely affects people at the lower end of the political spectrum and also reminding all of us who are in fact either self-described conservatives or libertarians or people who say hey, government really is a problem and government is bad, let's remember who it's worse for and that is people who are not as fortunate as we are. so if government would just get out of the way, stop intervening and stopped requiring individuals to do certain things whether it is to go to cosmetology school in order to become hair breakers or in other ways to stop them from

it does not seem to fit the data and if you look, kristin forbes who has left the mpc had a set of longsistent views as to why the removal was justified. if you look at michael saunders who started voting for a hike in june and we assume will again today, it is less clear why he has done that. he made a speech in april where he made himself, it was apparent he was one of the more hawkish members and he justified that by saying he thought growth this year would be above the bank of england's expectations. expecting 2% for gdp in 2017, they're probably going to say they have excited 1.6. growth has been hard for what they have anticipated which is significantly below. this view that growth is going to overshoot what is an old and much higher forecast seems tenuous. manus: he could shift the other way but that might be showing a little bit of shakiness. let's talk about the brexit from e.m., we have a cracking piece and they are looking at the metrics and saying brexit premeeting -- premium is dissipating. they looked at stocks and implied volatility. ,hey are back at 2015 levels credit de

this is now the 120th month in a row that the monetary policy committee — or mpc — has voted to keepng themselves to see the effect the bank's decision would have on sterling — which has been fairly steady over the past few weeks ahead of today's announcement... today we saw at slip against the euro to levels we have not seen since november. more now on the twists and turns of super thursday, as it is known. jeremy cook is chief economist at world first. good to talk to you, let's start with sterling and a drop, how significant is it and how low can 90, significant is it and how low can go, do you think? not too much of a significant drop, a nine—month low ina significant drop, a nine—month low in a currency is not something we would want to see obviously, but two hours before the press conference sterling hit an 11 month high against the us dollar, and as you said it has been fairly stable. it has been weak against the euro, strong against us dollar. how low can it go is obviously the key question now, and if we break below the 110 level in sterling euro, which is about 91p in euro

it was always kind of surprise that you had up to three members of the mpc in favor of such a big movetility when the rail side was doing well. -- real side was doing well. was going to soften and we have increasing signs it is happening. finally, we have a sense from the bank of england that they absolutely believe it inflation chart is not going to feel, going to take any effects. the biggest take away from the inflation report is at the bank of england took down is wage forecast. act at the same time, and very frothy labor market and tons of job creation but not generating increases. you would needed to see increases to turn into something more sinister. if you are the bank of england, you expect inflation to peak this year and a slowly, slowly edge back below the target by the middle of next year. francine: you are talking about this chart we are looking at, this is also something i will put on social media for radio listeners. the base rate for the bank of england and the inflation they have ignored high inflation for quite some time. this time, it was different because we hear ma