Macroeconomics: UK economy, IB Economics

Chicken Licken economics. I've never come across that before, and neither have many others. 

Has the Chief Economist of the Bank of England lost the plot. Yes, stories are useful in illustrating things, but I'm not sure that enough people's cultural capital extends to Chicken Licken for it to be an effective illustration of what he means.

To translate: he believes that there's too much pessimism surrounding the economy, and everyone is focussing on the worst case scenario. The result? Low levels of consumer and business confidence, and little immediate chance of the economy picking up, highlighting the importance of expectations - or animal spirits, if you will - in driving economic growth.

It also raises some interesting questions about the economic role of the Bank of England - is there a point at which such pronouncements threaten the bank's independence?

I don't like monthly 'snapshots' - how much is going to have changed? - but in this instance, the General Election appears to have reduced uncertainty and factory output seems to have stabilised. 

All of which goes to show how fragile business confidence is, and how astute Keynes was nearly a century ago.