BOE Loses Contrarian Chief Economist Who Led Inflation Warnings

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BOE Loses Contrarian Chief Economist Who Led Inflation Warnings

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Lucy Meakin and Jill Ward
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(Bloomberg) --

Bank of England Chief Economist Andy Haldane will leave the central bank this summer after a three-decade career marked recently by contrarian views on inflation and the U.K.’s economic outlook.

Haldane will step down after the June meeting of the Monetary Policy Committee to become chief executive at the Royal Society for Arts, Manufactures and Commerce from September, the central bank said.

The departure of the 53-year-old removes one of the most hawkish official sitting on the nine-member MPC. At a time when most central bankers are fretting about sluggish growth and unemployment, Haldane has warned fellow policy makers not to underestimate the risk of inflation.

He also pushed back against more negative views of the economy’s prospects following Covid and, in March, said the U.K. could see a “rip roaring” recovery.

The pound declined as much as 0.3% to $1.3695 after the news was announced, before recovering to trade little changed at 3:28 p.m. in London.

“With his departure the balance of votes could shift to the dovish side,” said Valentin Marinov, head of G10 FX strategy at Credit Agricole. “It would be difficult to find any chief economist who shares Haldane’s views on inflation at present. I would see the development as pointing at a less hawkish BOE.”

Haldane joined the BOE in 1989 after gaining a masters in economics from Warwick University.

He logged experience at the central bank in international finance, market infrastructure and financial stability during the financial crisis, before clinching his current role under previous Governor Mark Carney in 2014. That year, Time magazine named him one of the world’s 100 most influential people.

The BOE will advertise for a successor “in due course,” it said.

Haldane is known for his occasionally quirky speeches, having used Dr. Seuss to bemoan the reading age needed to understand the central bank’s communications, and used the metaphor of a dog catching a frisbee to analyze banking rules.

“If your business is trying to predict rates and quantitative easing then your business will be a bit easier without Andy’s speeches appearing left, right and center and somewhat clouding the issue,” said Tony Yates, a former BOE official who worked with him.

“If your business is trying to get up to speed on the latest interesting things in monetary economics and finance then it’s less good, because there won’t be Andy there picking up new things and explaining them.”

Haldane has also led the government’s Industrial Strategy Council and is the co-founder of charity Pro Bono Economics.

(Updates with economist’ comment in 11th, 12th paragraphs.)

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©2021 Bloomberg L.P.

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  • Top Kremlin Mouthpiece Warns of ‘Inevitable’ War With U.S. Over Another Ukraine Land Grab

    ALEXEY NIKOLSKYAll-out cyberwarfare, nation-wide forced blackouts, and the targeted disruption of internet services—for one of the Kremlin’s top propagandists, all of those tactics are fair game in what she describes as a fated war-to-come against the U.S.“War [with the U.S.] is inevitable,” declared Margarita Simonyan, editor in chief of the state-funded Russian media outlets RT and Sputnik, who believes the conflict will break out when, not if, Vladimir Putin moves to seize more territory from Ukraine.As Russia’s military buildup on Ukraine’s doorstep mounts, Kremlin loyalists have been urging for even more overt aggression and bloodshed in the campaign to annex Ukraine’s Donbas region. The only thing standing in the way, they say, is U.S. support for their beleaguered neighbor.NATO issued a statement on Wednesday demanding an end to Russia’s troop movements on the border with the disputed territory of Donbas in eastern Ukraine. It is the largest buildup of Russian troops since the annexation of Crimea in 2014. The U.S. underlined the statement this week by deploying two warships to the Black Sea.On Tuesday, Russian Deputy Foreign Minister Sergei Ryabkov threatened retaliation. “We warn the United States that it will be better for them to stay far away from Crimea and our Black Sea coast. It will be for their own good,” he said.The escalation was foreshadowed on state television’s Sunday Evening With Vladimir Soloviev over the weekend. Simonyan explained that it was time for Russia to gear up for a showdown against the U.S., and prophesized a kind of war driven by hacking, the forced disruption of internet access, the shutting down of power supplies, and an all-out offensive on U.S. infrastructure.“I do not believe that this will be a large-scale hot war, like World War II, and I do not believe that there will be a long Cold War. It will be a war of the third type: the cyberwar,” said Simonyan.She warned that—in this theoretical battle—the U.S. would plot to cut off the electricity of entire Russian cities. In turn, she speculated, Moscow would be able to force a blackout in Florida or New York’s Harlem at the flip of a switch.“In conventional war, we could defeat Ukraine in two days,” Simonyan said, “but it will be another kind of war. We’ll do it, and then [the U.S.] will respond by turning off power to [the Russian city] Voronezh,” she said.The top RT editor asserted that “[Russia] needs to be ready for this war, which is unavoidable, and of course it will start in Ukraine,” arguing that the Kremlin is “invincible where conventional war is concerned, but forget about conventional war... it will be a war of infrastructures, and here we have many vulnerabilities.”Her solution consists of Stalin-type measures to eliminate “vulnerabilities” in the run-up to another escalation, emphasizing the need for a hack-proof, government-controlled internet. “We still don’t have a sovereign internet, but God willing, we will,” she said.She wholeheartedly endorsed a suggestion from Vladimir Zhirinovsky, the ultranationalist leader of Russia’s Liberal Democratic Party, who argued that all of Russia’s opposition must be eliminated by May 1, 2021. With imprisoned opposition leader Alexei Navalny on a hunger strike—and suffering from severe health ailments after being denied appropriate medical treatment—the Kremlin seems to be firmly set on that course.Simonyan argued that once Russia minimizes its vulnerabilities and renders Putin’s opposition powerless—which she argued could happen in a matter of months—the Kremlin will finally be ready to annex Ukraine’s eastern region.“I’ve been agitating and even demanding that we take Donbas. We need to patch up our vulnerabilities as fast as we can, and then we can do whatever we want,” she boldly proclaimed. The host, Vladimir Soloviev, wholeheartedly agreed: “We only lose if we do nothing.” He argued that by absorbing parts of Ukraine—or the entire country—Russia would be able to remove the zone of American influence further away from its borders.As one of the Kremlin’s most valued propagandists, Margarita Simonyan is notoriously close to the Russian president and has received multiple awards directly from Putin. After accepting one such award in 2019, Simonyan thanked Putin “for the most important reward in life… this honor to serve one’s Motherland.”Her “service” has involved RT and Sputnik-driven disinformation operations aimed at influencing the 2016 U.S. presidential election, which she often boasts about by pointing to the inclusion of her name in various U.S. intelligence reports.Russia’s recent cyberspace activities seem to serve as good practice for the “inevitable war” foreshadowed by Simonyan.Last year, six Russian intelligence officers were criminally charged by the U.S. for using the world’s most destructive malware to force blackouts in Ukraine and damage the critical infrastructure of multiple countries, which caused nearly $1 billion in losses. On Monday, hackers operating from Russia targeted France’s homeschooling platform.The Kremlin is prepared to intensify its offensive against the West, but fears of the retaliation that would follow. The idea of a bulletproof “sovereign internet”—completely under government control within Russian borders—is already on the books, with Moscow having introduced the idea as a preventative measure against retaliatory hacking attempts from other nations.Simonyan argued that Russia will surely be able to exploit the U.S.’s “catastrophic” educational standards, and referred to American military analysts and specialists as incompetent and stupid. She heartily laughed about news that more than 200,000 U.S. service members experienced hearing loss due to defective earplugs.“We can never come to any agreements with [Americans],” Simonyan said, arguing that instead, Russia can just as easily defeat the U.S. in a cyberspace war.She added, mockingly: “We don’t even need the nukes.”Read more at The Daily Beast.Get our top stories in your inbox every day. Sign up now!Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.

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