It is difficult to put yourself in the shoes of another.

In Australia, we are fortunate to have comparative advantage in mineral resources, and to a lesser but important extent, the softer commodities. Generally, we are seen as a low sovereign risk, common law environment and a safe option over the Asia/Oceanic powerhouse economy. 

Spare a thought for the UK - an ancient financial, insurance and trading hub, now disrupted by Brexit and technology. Probably not a lot of comparative advantage there anymore. The implications for Britons are far-reaching, but it is at least fair to say the UK economy will find it difficult to recover for some time. A lot will depend on whether comparative advantage can be retrieved through advantageous international trading arrangements post-Brexit.

Is this possible? Time will tell, but in the meanwhile imported inflation as a result of a weak Sterling is the reality.

While tempted to move now to improve buying power and create dry powder for a 'just in case' future, stubborn real wage decline and massive household debt in the UK resulted in not so much as a budge in the BOE's program, yesterday. 

Still, with free and easy money, it is no wonder British households loaded up - and therein lies Mark Carney's answer.

Enjoy the weekend.

Mike

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