Post-Brexit Cash Hoarding Is “Worrying Signal” For UK Economy

Critics warn that “the Monetary Policy Committee made a serious policy error in August when it cut rates and restarted QE,” according to Pantheon’s Samuel Tombs, as the massive spike in UK narrow money-supply – which we first noted here – reflects “uncertainty, not income growth.” Pantheon warns that they doubt the biggest surge in cash-hoarding since Lehman “signals that an economic renaissance is on the way. On the contrary, the pick-up in the desire of households and firms to hold money, as opposed to other assets, is a worrying signal.”
On the heels of Japan, Switzerland, and Germany, the UK’s biggest surge in cash-hoarding since Lehman has been suggested by some as sign – along with better than expected economic data – that the British economy is faring well. However, as we noted previously, this is almost certainly wrong and Pantheon agrees…

This post was published at Zero Hedge on Sep 19, 2016.