Kit Juckes, Research Analyst at Societe Generale, suggests that the UK is another economy in need of fiscal and monetary policy working together.

Key Quotes

“A weaker pound is both inevitable and at the margin, helpful but it’s fiscal policy which would be most effective in compensating for the hit to demand that is now feeding through.

The big focus is on the MPC meeting on Thursday of course, but in the longer run, the more uncertainty there is about fiscal policy, the more downside there is to sterling. As for the current lack of clarity about policy towards inwards investment into the UK at a time where there’s the small matter of a GBP 100bn current account deficit to fund – goodness knows how much gilt yields would have to go up if they become the sole means of attracting foreign money.”