Bank of England

Thursday, May 16, 2019 - 13:30

MNI POLICY: BOE Haskel: Policy Transmission Hit By Intangibles

By David Robinson

LONDON (MNI) - Bank of England Monetary Policy Committee member Jonathan Haskel said in a speech in York that the growth of intangible assets could impact both policy transmission and financial stability.

The following are key points from the speech, which did not address current monetary policy setting:

--Haskel focussed on his signature research topic: the rapid growth in firms' intangible assets such as software, reputation and knowledge relative to tangible capital, such as hardware and buildings.

Haskel had previously said that Brexit uncertainty could be a key factor behind recent weakness in UK investment but here he floated the idea that it may also reflect under-recorded investment in intangibles.

"Intangibles appear to be part of the story (behind weak investment) but not all of it," he said.

--He said that new firms in particular which rely on intangibles may have to shift their financing away from traditional bank lending which uses tangibles, such as buildings, as collateral.

"There are implications for financial stability and monetary policy transmission, but the overall balance of direction is not clear," he said.

--Haskel said that the way profits are marked up from intangibles, with high profile brands, for example, able to achieve premium prices, could impact the dynamics of output, wages and inflation.

--MNI London Bureau; tel: +44 203-586-2223; email:

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