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MNI POLICY: BOE's Haldane: Optimistic On Investment Pick-Up

By David Robinson
     LONDON (MNI) - Bank of England Chief Economist Andy Haldane said Monday the
lifting of UK political uncertainty and companies' strong balance sheets should
boost investment.
     Haldane said there were already signs in business surveys of improving
investment. 
He was one of seven Monetary Policy Committee members who voted in favour of
unchanged policy rather than a rate cut at the January MPC meeting. He made no
direct reference to monetary policy.
     "Towards the tail end of last year and the early part of this ... a lot of
political uncertainty has dissipated in the UK. Some, if not all, of the Brexit
uncertainty has also lifted," he said.
     UK investment growth has been exceptionally weak by historic standards but
Haldane said that the outlook was brighter.
     The dissipation of uncertainty and companies' low leverage should result in
a marked improvement.
     "As that cloud of uncertainty lifts you would hope and expect that the
balance sheet fundamentals would reassert themselves" and that investment would
pick up, he said in a question and answer session at an event hosted by
Bloomberg.
     The cost of capital has never been lower and the returns higher and that
gap "is probably as wide as any time in the past fifty years," he added.
     In other remarks Haldane said that he did not believe de-globalisation was,
as yet, a reality as global trade had been weak but had not turned negative.
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,MC$$$$,MI$$$$,M$$BE$,MGB$$$]

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