Few central bankers will have clocked up more miles travelling the UK than Andy Haldane. This week, the Bank of England’s chief economist is on the move again, as he departs Threadneedle Street after 32 years.
Stepping down after his final monetary policy committee (MPC) meeting on Thursday, Haldane leaves with a reputation as a maverick economist interested in big ideas – willing to look beyond dry economic models for insights by talking to small businesses and community groups up and down the country, on a path less travelled for a central banker.
He appears as comfortable in the Guiseley Factory Workers Club as in the gilded corridors of Threadneedle Street, and it is this curiosity that is taking him to the Royal Society of Arts thinktank, where he will become chief executive later this year.
This week, Haldane is expected to once again go against the grain and vote against his eight colleagues on the MPC on Thursday – including the governor, Andrew Bailey.
He warns that Britain is at the “most dangerous moment” for managing inflationary risks since the UK dropped out of the European exchange rate mechanism in 1992, as the economy accelerates out of the Covid-19 recession at record pace. In characteristically colourful language, Haldane has warned of the “beast of inflation” stalking the land once more, with booming demand, labour shortages and supply-chain disruption risking a “wage-price spiral familiar from the 1970s and 1980s”.
For Haldane, that warrants action to reduce the scale of the Bank’s £895bn quantitative easing bond-buying programme, and take some heat out of a red-hot economy. At his first MPC meeting seven years ago this month, Haldane voted with the consensus. He will finish his tenure as a lone dissenting voice.
Regarded as a radical who backed the Occupy protests in 2012 and criticised excessive bank bonuses, the economist who grew up in a working-class household in Guiseley, Leeds, has made headlines in the past year with his colourful analysis of the Covid recession.
“Now is not the time for the economics of Chicken Licken,” he warned in a speech denigrating media pessimism last autumn. The Daily Mail labelled him “Mr Boom”, in contrast to the prime minister, who was dubbed “Mr Doom”.
Upbeat about the prospects for a “V-shaped” recovery fuelled by billions of pounds in household savings built up in lockdown, he has found himself at odds with some of his more cautious colleagues. But it is his willingness to speak his mind that will make him a tough act to follow.
Haldane has not always played the arch-hawk: he argued for low rates and warned of the risks to hard-pressed workers from a “lost decade” for wage growth in the 2010s, made worse by the gig economy. He had been favoured by the former Labour shadow chancellor, John McDonnell, as a future governor of the Bank.
At the RSA, he is expected to explore many of the issues that have become his hallmark: the threat to jobs from technology, raising regional productivity, and making economics more useful for everyday problems.
This breadth will be missed at Threadneedle Street, as it loses one of the best communicators in the often-dry world of economics. But for an economist who loves to travel, a return trip to the Bank as governor ought not to be ruled out.
