On 21st October, I attended a Bank of England briefing hosted by the ICAS London Area Network.
What I found most fascinating was hearing about the inner workings of the Bank of England, something I’d not looked into before.
Whilst it may seem the Bank of England operates from its central London headquarters looking at hard numbers, the reality is quite different:
The Bank of England has a decentralised agent model, with 12 agencies spanning the UK. Agents focus on the narrative over numbers, each connecting with hundreds of business contacts to understand sentiment, what the outlook is and plans, as well as the numbers. The agent system was first a means to distribute banknotes, not to gather intelligence, when this was centralised, the Bank of England saw the value in having ‘boots on the ground’ and kept their local presence.
If, like me, you find this fascinating, you can read more (including the agents’ findings) here: https://www.bankofengland.co.uk/about/people/agents
Now, onto the actual debrief – these are the points I found most interesting:
- The economic outlook is not overly positive at the moment, inflation remains above target and the interest rates we see in the market are pricing in a high risk premium against the interest rate forecast
- Larger corporations are fairly resilient, especially sectors tied to the green transition, infrastructure and defence, with more pressure on consumer facing industries as consumers are increasingly hanging onto their cash
- We aren’t really seeing much of an impact of AI on jobs, there was a far larger impact from the increase in employer NICs. Businesses have admitted that AI is being given as a justification for job losses whilst it isn’t always the underlying factor.
- There was a challenge by an audience member on the sufficiency of CPI, they felt it didn’t capture inflation consistently with their experience.