Angus Armstrong's picture
Affiliation: 
National Institute of Economic and Social Research
Credentials: 
Director of Macroeconomic Research
Visiting Professor, Imperial College London

Voting history

Migration and the UK economy August 2014

Question 1: Do you agree that migration to the UK can be expected to be beneficial for the average income of current UK inhabitants in the upcoming decade?

Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
On average - yes, strongly agree. Distributional consequences are also important. They maybe hard to detect statistically, but they important to analyze - whether big or small.

UK House Prices and Macro-Prudential Policy July 2014

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Question 2: When housing-related risk is deemed excessive from the viewpoint of financial stability, do you agree that the correct response is to deploy macro-prudential tools, leaving interest rates focused on the needs of inflation and aggregate real activity?

 
Answer:
Disagree
Confidence level:
Confident
Comment:
My answer is because it depends on what one thinks is causing the excessive risk. If there has been a loosening of credit supply conditions, then macro-pru tools seem appropriate to influence supply. But if there is a high demand for mortgages because the cost of borrowing is held artificially low then just relying on a supply response may create further distortions. In this case deploying macro-pru tools and interest rates together would be more appropriate.

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Question 1: Do you agree it is time for more robust policy action to prevent a build-up of excessive housing-related risk?

 

 
Answer:
Disagree
Confidence level:
Confident
Comment:
While 10% house price inflation on a continuous basis would create problems, the current high level of prices follows three or four years of little growth. Moreover, some leading indicators suggest the house price inflation rate will slow considerably in coming quarters. It is hard to see how such little increase in lending can constitute a build up of significant risk. While more robust policy may prove necessary in time, I think it is hard to conclude that we have reached that time already.

Euro Area Deflation and Risk for UK Economy May 2014

Question 2

Do you agree that a deflation in the Euro area (as defined in Question 1) would pose a considerable risk to the UK recovery?

Answer:
Disagree
Confidence level:
Confident
Comment:
Moderate deflation over perhaps two or three quarters in the euro zone would be a 'headwind' for the UK through usual channels. However, banks are much less exposed to troubled countries and credit and labour market conditions have improved to the extent that I would not expect the UK to fall beck into recession as a direct consequence.

Question 1

Do you agree that there is a significant risk of a sustained deflation across the Euro Area in the coming two years?

Answer:
Agree
Confidence level:
Confident
Comment:
In NIESR's latest quarterly forecast (published last week) we have euro area inflation of 0.1% to 0.2% in the third and fourth quarters of this year as a central case. Deflation, as defined, would certainly fall within a 25% probability around this central case. The critical question would then become what happens to expectations, which in some part depends on the ECB. NIESR's forecast has inflation back over 1% in 2015 as a central case.

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