The Bank of England (BoE), preparing for a possible no-deal Brexit, is trying to harness reams of real-time digital data on traffic jams, card payments and shipping in case it has to make a snap decision to raise or cut interest rates.
The BoE typically has plenty of time to think about its next steps and announces its rate decisions every six weeks or so after studying established economic indicators, many of which take weeks to prepare.
However, it might have to move much more quickly if Britain leaves the EU without a deal to cushion the shock, a real prospect for later this year with British Prime Minister Theresa May struggling to break a Brexit impasse in parliament.
BoE chief economist Andy Haldane last week said that the central bank was monitoring data on road congestion around major ports, collected from Google Maps, as part of a push to improve its real-time understanding of the economy ahead of Brexit.
As well as traffic jams at ports, officials are looking at shipping and aircraft flows, and financial transactions data. They are also speeding up their scouring of Google and Twitter to try to get a more up-to-date feel for the mood of consumers.
Crucially, the BoE’s number-crunchers want to know which micro-level data they can trust and which tend to send misleading signals.
Shortly after the Brexit referendum in 2016, surveys of companies warned that the economy was nosediving, prompting the BoE to cut interest rates to a record low and ramp up its massive bond-buying program.
However, the economy — in particular consumer spending — largely weathered the shock, raising questions about whether the BoE should have acted more cautiously.
In a speech at the University of Sheffield on May 7, Haldane said that monetary policymakers might be able to put more trust in so-called high-frequency data, some of which is now being published by Britain’s statistics office.
In other fields, errors in weather forecasting have been halved in a generation, and digital data and new ways of modeling were helping scientists to understand how oceans, the Internet and galaxies work, he said.
“Until recently, fewer such high-resolution data existed when it came to tracking flows of goods and services, people and money through our economy. That is changing,” Haldane said.
The BoE has said that there would be no automatic reaction to cut or raise interest rates after a no-deal Brexit.
On the one hand, consumers and businesses might cut back on spending, hurting growth and making the case for a rate cut.
However, the pound is likely to tumble, pushing up import prices and inflation, normally arguing for higher interest rates.
As part of its dig into the data, the BoE is trying to pull apart the price chain for imported goods from the moment they enter Britain to when they go onto the shelves.
That could give policymakers a better sense of what kind of short-term inflationary hit they could expect from any tariffs on imports from the EU and what the impact on supply chains could mean for inflation.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last