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Broadbent's speech interesting but not really market moving

BOE
  • Most of Broadbent's speech more looking at the medium-term outlook than anything imminent for monpol. He does look at household deposits and M4 and notes that "household deposits (and aggregate M4) have actually been declining for some time since mid-2021, relative to household income." But adds that "The levels of these aggregates, on the other hand, are still higher than in the prepandemic period."
  • "On one view (the “buffer stock” approach) people are relatively tolerant of small variations in their money holdings and respond – whether by spending more on goods and services, buying other financial assets or paying down debt – only once deposits hit certain thresholds. If this is right it’s the level of money that matters and the fact that, on this measure, there still seem to be “excess” deposits will continue to support consumer spending for a while yet. If, on the other hand, you believe that people respond more rapidly to an increase in the supply of money, the large accumulation of deposits during the pandemic is increasingly irrelevant and what matters more are the more recent, negative trends. "
  • However, Broadbent doesn't really state in any certainty which of these views he thinks is more plausible.
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