Andy Haldane: We can fix the cost of living crisis. But will we? | Andy Haldan


Andy Haldane has a simple but clear message for those looking to replace Boris Johnson as Prime Minister: Britain has serious economic problems and they won’t be solved by massive tax cuts.

Likewise, according to the man who until last year was chief economist at the Bank of England, the solution to Britain’s cost of living crisis does not lie in the decisions taken by Threadneedle Street in terms of interest rates.

Haldane then led the Royal Society of Arts (RSA) think tank, via a stint in the Cabinet Office, helping to draft Johnson’s upgrade white paper. Although there will soon be a new face in Issue 10, Haldane says the next Prime Minister must not just stick to the leveling program, but turbocharge it.

Speaking before Johnson announced he was stepping down, Haldane said: “The solution to the growth conundrum and the solution to the cost of living crisis both lie on the supply side of the economy. ‘economy.”

He says Britain has “long-standing, deep-rooted and structural” economic problems, and warns that cutting and regularly altering the country’s growth engine restart program is not helping.

“What we need is the scale, duration and coordination of a plan. It has never been more necessary – and currently we don’t really have it.

The regional economic renaissance is at the heart of what makes Haldane tick. Whether it’s called leveling up or given another name doesn’t matter to the economist, who grew up in the Leeds suburb of Guiseley, a former industrial town known as the home of Harry’s fish and chips Ramsden and Silver Cross strollers.

“When I was growing up, Bradford and Leeds weren’t quite on the same level, but close. But in the last 40 years Leeds have hit the afterburn while Bradford kind of got stuck,” he says. “There is a stir now in Bradford. It’s moving, and the status of city of culture [in 2025] will put the rocket boosters behind that.

Haldane criticizes the government for not giving more punch to one of its flagship policies. “You won’t be surprised to learn that I was encouraging you to go further, faster,” he says of the time he spent helping develop strategy for former commissioning secretary Michael Gove. upgraded, while on a six-month loan from the RSA.

With growth slowing across the economy and inflation at its highest level in four decades, calls for new ideas that could pull Britain out of a downward spiral are about the only something that is not missing. With a severe shortage of workers and raw materials weighing on growth, Haldane’s analysis of the issues at hand is stark.

Rising employment – helped by migrant labour, people staying longer at work and women’s increased participation in the labor market – has been the sole driver of economic growth after the financial crisis of 2008. Meanwhile, productivity gains – when firms increase output with less or the same inputs – have stagnated as business investment has dried up.

However, the engine of growth has stalled due to labor market disruptions – by older people leaving the workforce during the pandemic and by Brexit hitting EU migration. “That’s one of the reasons for the cost of living crisis. This is a key source of the supply-side shocks we have seen. If the supply of labor – that engine of labor – is gone, we need the engine of productivity to kick in. The arithmetic of growth really is that simple.


Age 54
Family Lives in South London with his wife, Emma Hardaker-Jones, who is Director of Human Resources at Legal & General. They have three children and a dog.
Education BA in Economics, University of Sheffield; MA in Economics, Warwick University.
Last holidays Deal, on the Kent coast.
Best advice ever given “At the beginning of my career at the Bank, I deplored the way it operated. The person said to me: ‘What are you talking about? You are part of the Bank. If that doesn’t work, just switch banks.” It was such an obvious point, but of course absolutely right.
Biggest Career Mistake “I’ve done a lot, and I don’t apologize for that. I hope I learned from them.
Words he abuses “White paper.”
how he relaxes Walk the dog and watch cricket, his favorite sport. “There’s no better way to relax than to sit and watch the cricket on a sunny summer’s evening.”

Haldane was born in Sunderland and is proud of his roots. At home he has a signed photo of the wonderful save made by Sunderland goalkeeper Jim Montgomery in their surprise 1973 Cup final victory over Leeds. More recently, his hometown was a bellwether for the 2016 Brexit vote, a subject on which Haldane is unusually tight-lipped.

When asked if Brexit is a threat or an opportunity, he replies: “It depends on what you do with it. It is prospectively both. I obviously chose not to give my opinion.

But failure to tackle Britain’s problems and boost productivity after a decade behind its economic rivals – and with deep regional divisions – will have serious consequences: “Without a supply-side strategy, the economy won’t grow and the cost of living crisis won’t be solved.It’s as simple as that.

Haldane noted that this would drive inflation higher sooner than most economists, warning last year in characteristic and colorful terms that the “inflation beast” was back after a few decades of slumber. Just over a year ago, his optimistic view of economic growth led the Daily mail to label him ‘Mr Boom’, as he warned of the ‘Chicken Licken’ pessimism that is dragging the country down.

Despite Haldane’s warning that this was the “most dangerous moment” since the UK abandoned the European exchange rate mechanism in 1992, his colleagues on the monetary policy committee ignored its calls for higher borrowing costs.

Although touted as a possible successor to Mark Carney as Bank Governor, Haldane says he never aimed for the top post at Threadneedle Street. “I had done everything I wanted to do at the Bank, basically. I had done most of the things except print the notes. The job I wanted most was, incidentally, the one I was doing when I left.

After spending most of his career looking at big picture issues, the 54-year-old will focus more at RSA on substantive issues: skills, investment and decentralization – where he senses the big challenges facing the economy is facing.

“I didn’t miss it at all. What I’m doing right now is, I think, where politics should be focused.


Comments are closed.