In this podcast episode (sponsored by Pepperstone) Michael Hewson and Michael Brown discuss the current state of the markets in light of recent tariff announcements, the introduction of special guest Andrew Sentance, and insights from his experience on the Bank of England's Monetary Policy Committee.

The conversation delves into the independence of the Office for Budget Responsibility (OBR), the impact of interest rates on the economy, and the importance of diverse perspectives in monetary policy.

The episode concludes with a discussion on the need for improved communication from the Bank of England.In this conversation, Andrew Sentance discusses the historical context of interest rates, the perspectives of businesses on monetary policy, and the complexities of predicting inflation and unemployment in the UK economy.

He emphasizes the importance of stability over low rates, the challenges in understanding equilibrium rates, and the dynamics of the labour market. Sentance also shares insights into the data analysis process within the Monetary Policy Committee (MPC) and highlights innovative communication strategies used during his tenure.

Chapters

00:00 Market Reactions to Tariffs

02:45 Introduction of Special Guest Andrew Sentance

03:10 Insights from the Bank of England's Monetary Policy Committee

07:52 Evaluating the OBR's Independence

12:24 Interest Rates and Economic Impact

15:10 Dissenting Views in Monetary Policy

19:03 The Importance of Local Knowledge in Economic Policy

22:56 Independence of the Bank of England

23:31 Improving Communication from the Bank of England

29:36 Historical Context of Interest Rates

32:18 Business Perspectives on Interest Rates

33:45 Understanding Equilibrium Rates

38:21 Inflation Predictions and Economic Factors

41:41 Labour Market Dynamics and Unemployment

44:38 Data Analysis in Monetary Policy

51:09 Innovative Approaches in Monetary Policy Communication