Kate Barker's picture
Affiliation: 
British Coal Staff Superannuation Scheme
Credentials: 
former member of the Bank of England Monetary Policy Committee

Voting history

Labour Markets and Monetary Policy

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Question 2: Do you agree that, in a period of great uncertainty and after a prolonged period of weak real wage growth, monetary policy makers can afford to wait for greater certainty about real wage developments and building inflationary pressure before raising interest rates?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Wages are not the only thing that matters. we learned about the dangers from credit imbalances in the 2000s. Monetary policymakers should worry about the risks of economic volatility as well as just the inflation target. This is all supposed to be taken care of by the FPC - but unlike Ben Broadbent my view is that the FPC and MPC should be one - though I have not always thought that.

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Question 1: Do you agree that a strong labour market is a good indicator of building inflationary pressure?

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Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
yes - it's hard to think that if people can get jobs and are able to pick and choose a little - this won't put upward pressure on wages, ceteris paribus. This could of course be offset if it prompts a productivity response.

House Prices and the UK economy

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Question 2: Do you agree that a more widespread weakening of the UK housing market will slow UK GDP growth significantly?

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Answer:
Strongly disagree
Confidence level:
Confident
Comment:
The modest weakening which I expect would not have more than a very modest impact on GDP in the short-term, and long-term might be mildly positive.

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Question 1: Do you agree that the phenomenon of declining house prices will ripple out from the London property market leading more UK regions to experience falling prices?

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Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
As income growth remains weak, the rate of new home supply in England has picked up. There has been the first move up in interest rates. This all suggests slightly weaker demand at present prices, and so outside London prices may weaken, rising slowly or even falling a little in nominal terms. however, the reasons for this will be a little different from those driving London house price declines at the moment (which include the impacts of stamp duty changes) so I would not describe this as 'rippling out'. And a sharp shock from higher interest rates or a move into recession with rising unemployment seems unlikely, so I am not anticipating a change in economic conditions of the type which would prompt a large change in house price expectaions and thus a damaging sharp fall in house prices. A slow move down relative to incomes, especially young people's incomes, is in any case quite desirable.

Wages and economic recoveries

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Question 2: Do you agree that the different behaviour of UK real wages relative to Eurozone wages during the Great Recession is in large part due to the UK having different labour market policies?

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Answer:
Agree
Confidence level:
Not confident

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