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NOTHING TO SHOUT ABOUT, WAS IT? >> I'M NOT SURE YOU CAN READ TOO MUCH INTO THE FUTURE. IT WAS EXCEPTIONALLY NEGATIVE FROM TRADE. I WOULD SAY THAT CONSUMER SPENDING IS HARDLY SURPRISING IT IS GROWING SO WELL. WE HAVE LOW INFLATION RATES. ALL OF THE OTHER COMPONENTS OF GDP. I AM NERVOUS ABOUT. THE GOVERNMENT SPENDING. CAN IT GROW AT THESE RATES WHEN WE HAVE SUCH AUSTERITY PLANS FOR THE NEXT FIVE YEARS? I SUSPECT NOT. THE TRADE, INFLUENCE BY GLOBAL ECONOMICS AND THAT STERLING'S UP. I AM ABOUT THAT ON BALANCE. MARK: THIS IS WHERE YOU WILL LAY IT OUT FOR ME. YOU ARE STILL GOING FOR A RATE HIKE IN THE FIRST HALF OF NEXT YEAR. MARK CARNEY SAID THAT THE LOW RATE ENVIRONMENT WILL REMAIN FOR SOME TIME. ACCORDING TO YOU, SOME TIME MEANS -- GEORGE: MY VIEW IS MADE. EVEN IF THEY DO RAISE RATES IN MAY, YOU COULD NOT DESCRIBE THAT AS A LOW RATE ENVIRONMENT. RAISING TO 75 BASIS POINTS DOESN'T MEAN WE ARE TIGHT MONETARY POLICY, WE ARE STILL EXCEPTIONALLY LOOSE. IN THE 300 OR 400 HISTORY OF THE BANK OF ENGLAND WE HAVE NEVER GONE BELOW 2%. ANYTHING BELOW 2% IS EXCEPTIONALLY LOOSE. MARK: THE FED ON THE 16 OF DECEMBER, DOES WHAT IT DOES INFLUENCE THE BANK OF ENGLAND OR NOT, GEORGE? GEORGE: DON'T FORGET WHAT DAVID MILES SAID IN AUGUST. HE SAID IT WOULD BE "DAFT" TO THINK THE BANK OF ENGLAND COULD NOT MOVE BEFORE THE FED. THE BANK OF ENGLAND WILL MOVE SLIGHTLY AFTER THE FED BECAUSE WHEN THE HEAD MOVES IT WILL PUT UPWARD PRESSURE ON THE DOLLAR AND DOWNWARD PRESSURE ON STERLING. IT WILL LOOK LIKE A RATE CUT SO THEY CAN SAID THAT OFF WITH A RATE HIKE. IN TERMS OF OUR POLICY OUTLOOK WITH THE ECB ON THE ONE HAND, WHICH WE WILL TALK ABOUT, THEY WILL EASE POLICY NEXT WEEK. THE FED, A COUPLE OF WEEKS AFTER, WE THINK WILL RAISE INTEREST RATES. WE ARE SANDWICHED BETWEEN THE TWO. IT IS NOT SURPRISING WE WAIT A BIT LONGER BEFORE MOVING OURSELVES. ERIK: HELP ME PUT THE BRITISH ECONOMIC SITUATION IN PERSPECTIVE. WHAT FACTOR IS DRIVING THE U.K. ECONOMY THAT MOST CLOSELY RESEMBLES WHAT WE SEE IN THE UNITED STATES, AND WHAT RESEMBLES WHAT WE SEE ON THE CONTINENT OF EUROPE? GEORGE: WE CAN SAY THE DOLLAR IS INCREASING AND STERLING IS INCREASING AT THE SAME TIME AS CONSUMER SPENDING. IT MAY NOT BE AS STRONG AS IT HAS BEEN IN THE U.S., BUT IT IS GROWING 3% OR SOMETHING LIKE THAT. WE HAVE .8% TODAY, A DECENT RATE . OVER 3% YEAR ON YEAR. IT IS NOT SURPRISING WHEN YOU HAVE INTEREST RATES SO LOW, AND THE SIDES OF THE LABOR MARKET THAT IS GETTING CLOSE TO EQUILIBRIUM. IT IS PUSHING UPWARDS ON WAGES, AND PUSHING DOWN ON UNEMPLOYMENT. ERIK: HOW WOULD YOU DESCRIBE ACCESS TO CREDIT IN THE U.K.? GEORGE: IMPROVED AWARE WAS A FEW YEARS AGO. I'M SURE IT'S NOT THAT TO WHERE IT WAS, IF YOU LOOK AT HOW MANY MORTGAGES ARE TAKEN OUT, IT IS NOWHERE NEAR THE SCALE IN 2006 BEFORE THE CRISIS. WE WOULD NOT WANT IT TO GET BACK TO THOSE LEVELS, BUT CREDIT HAS IMPROVED MARKEDLY. NOT JUST ON THIS SIDE OF THE CHANNEL, BUT IN EUROPE AS WELL. MARK: SHOULD WE TALK ABOUT THE ECB? A 36-DAY WAIT CENTS MALTA -- SINCE MALTA. IF MARIO DRAGHI HAS TO SURPRISE THE MARKET, WHAT, NOW, COUNTS AS A SURPRISE. WE HAVE BEEN DEBATING AND RUMINATING FOR FIVE WEEKS. GEORGE: EXPECTATIONS SURROUNDING OF THE ECB EXTENDS QE . WHETHER THEY INCREASE THE RUN RATE OF QE, POSSIBLY. DO MORE QE OVER EACH MONTH OVER A LONGER PERIOD. THEY COULD CUT INTEREST RATES. DOING 10 BASIS POINTS. THEY COULD ABOLISH THE FLOOR. THERE ARE A COMBINATION OF POLICIES. EACH ONE COULD BE POWERFUL, BUT EACH ONE TOGETHER COULD BE MORE THAN THE INDIVIDUAL PART. MARK: COULD IT DRIVE THE EURO TO PARITY? GEORGE: OUR OWN FORECASTERS HAVE THE EURO GOING BELOW PARITY AND A YEAR AND A HALF. MARK: IN THE NEAR TERM? GEORGE: I'M NOT SURE IT GETS DOWN THAT FAR. OF COURSE, THE ECB WILL BE CAREFUL. THE LAST THING THEY WANT IS TO SURPRISE BY DOING LESS. IF THEY DO LESS AND PUT UPWARD PRESSURE ON THE CURRENCY, IT WILL BE LESS LIKELY THEY HIT LONG-TERM INFLATION GOALS OF 2% OVER THE NEXT FEW YEARS. THEY ARE WORRIED ENOUGH ABOUT NOT MEETING INFLATION EXPECTATION. THEY ARE BETTER TO OVERDELIVER THAN UNDER DELIVER. MARK: THANK YOU FOR YOUR GUIDANCE ON WHAT THE ECB COULD DO NEXT WEEK.