Carney Q&A Con't.: Q: Trend of business.........>

BOE: Carney Q&A Con't.: Q: Trend of business cutting investment in favour of

hiring occurred following GFC, hurting productivity. Are we on that path again

and could that worsen productivity?

- A: Broadly agrees on similarities with post-GFC economy, but some subtle

differences includes private debt, change to welfare and government policies in

post-GFC. Now, evidence points more to uncertainty curtailing investment.

Consequence is hiring spree, implicating productivity.

- Q: More confident consumers using credit contrast with "moaning minnies" in

business, refusing to invest capital. Is there some way the Bank can encourage

investment?

A: Households are not running up credit card debt - households are supported by

wage growth, real income growth. Wouldn't use term "moaning minnies". Businesses

face questions over market access, international supply chain, export markets,

so understandable investment is curtailed. Business doesn't expect this to be

resolved anytime soon (not by end of year).