Carney, Investors Disagree on BOE Jobs Outlook

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Sept. 12 (Bloomberg) -- Erik Nielsen, chief economist at Unicredit Global and Erik Britton, director at Fathom Consulting talk with Guy Johnson about the difference in opinion between Bank of England Governor Mark Carney and investors over the pace of employment gains in the United Kingdom. They speak on Bloomberg Television's "The Pulse."

The biggest challenge that he has is the communication one.

Having to communicate to a series of different audiences with different issues.

How does he taylor that message to parliamentarian.

In today's world, you can't have different messages to different people.

At the end of the day, we all watch you and we make conclusions.

You can't really separate these things.

To some extent, the surveys suggest that households think that rates will stay low for a long time.

Will they transact on it?

I am not sure.

I believe he is attempting forward guidance.

Maybe unemployment will falter the threshold or for other reasons, you can't tie your hands credibly to a particular strategy.

It needs persuading to take up a different view.

He was slightly a little edgy in nottingham but generally calm and collected.

Where do you think he loses that and starts to react to the markets?

We were talking earlier on, and the view is that maybe we see him hinting that there will be key points.

Is that viable?

That is the key question.

If that drives up u.s. yields, the likelihood is it will wraparound markets and pushed the long end here unless we prevent that from happening.

Step back.

We know the u.s. is going to taper and we have seen the curve shift type or -- higher.

What they are trying to do is buy forward guidance that we don't want this tightening because the recovery is more fragile than in the united states.

The market says, we don't believe you.

So they price up a steeper curve.

A lot of household loans are linked to the bankrate but if you go down to your bank and say, i would like to take a loan out, it seems to apply to the business people of nottingham.

The high-frequency data coming out is painting an incredibly strong picture.

At what point does he have to make the point that he is in control?

I think it is coming quite soon.

We are seeing unemployment falling quite rapidly and expectations starting to go up a little bit.

Do we have sustainable growth right now?

No.

i feel it is within the next few months that they will have to offer an indication that he is ready to act not just in terms of forward guidance but putting more quantitative easing on the table.

I share your views, fundamentally.

The more likely scenario is that the economy will do well enough and we have a very unbalanced recovery.

We see headline numbers looking ok but it is driven by real estate and consumer loans.

The problem comes not in a couple months, but a year or so.

I think we just keep on seeing this forward growth.

There is inflation -- all we are doing is hiring estate agents.

It is a massive change.

What do you mean there is no inflation?

My point is that there is no domestic inflation.

That is bad.

I see lots of inflation.

My consumer basket increases larger than cpi.

It is bad inflation.

We are so unproductive hiring people in real estate sectors.

I think journalists and economists say we should not point to many fingers.

We will leave it there.

We will monitor the live event.

This text has been automatically generated. It may not be 100% accurate.

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