At long last, Dhingra | Financial Times

Here are some things that had happened, up until yesterday, since Swati Dhingra joined the Bank of England’s Monetary Policy Committee:

— The UK changed government, twice
— The MPC was bigfooted repeatedly by the Financial Policy Committee
— More than half the war in Ukraine
— A plunge in energy costs

Here is a thing that had not happened, up until yesterday, since Swati Dhingra joined the Bank of England’s Monetary Policy Committee:

— Swati Dhingra gives a speech about monetary policy

This morning, we finally learned what it sounds like when doves cry, with Dhingra giving a speech about the UK’s ‘Cost of Living Crisis’ at the Resolution Foundation, a British think-tank:

— You can read her speech here
— You can watch back the talk (which was largely off-script), here

These are the important bits:

Overtightening poses a more material risk at this point, through potential negative impacts from increased borrowing costs and reduced supply capacity going forwards. It risks unnecessarily denting output at a time when the economy is weak and deepening the pain for households when budgets are already squeezed through energy and housing costs . ..

In my view, a prudent strategy would hold policy steady amidst growing signs external price pressures are easing, and be prepared to respond to developments in price evolution.

She also raised this interesting point, efficiently captured by Reuters’ Andy Bruce:

But tl;dr: shockingly, she’s against further rate rises.

Now, we can argue the toss over whether this makes any sense. Dhingra, alongside fellow dove Silvana Tenreyro, voted to keep the bank rate (now at 4 per cent) at 3.5 per cent at last month’s meeting. Nothing in today’s speech indicates that she’s since be won over to the merits of those extra 50bps, so why isn’t she calling for a rate cut? The comms might be tough for the BoE but is that Dhingra’s problem to deal with?

We can also argue over whether what Dhingra, Tenreyro or their policy opposite, fellow external member Catherine Mann, do and say actually matters. After all, this an MPC where what the men say, goes: all recent decisions have been splits where Governor Andrew Bailey, his deputies and external Jonathan Haskel have called the shots.

What there’s unlikely to be much argument over is that this speech was massively overdue. Other than an interview with the London Observer, published in December, it’s been more-or-less radio silence since Dhingra replaced Michael Saunders in August.

Alphaville’s calculations based on the BoE’s publication records indicate it has been 211 days since Dhingra joined the MPC, a massively longer pre-speech gap than other recent joiners:

Bar chart of It’s taken forever to get a Swati Dhingra speech showing A long, long time

Meanwhile, Mann gave two speeches in February alone, and a Bloomberg TV interview this month. Even ex-chief economist Andy Haldane has weighed in (including a new interview with the Borg today).

For the reasons already mentioned, this delay may not actually matter very much. But at a time when so much is in flux, it feels excessive. Or is that just us?

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