Monetary Policy

Bank of England lagging behind again



Julian Jessop quoted in The Mail

In the Media

Christopher Snowdon writes in Spiked

Shadow Monetary Policy Committee quoted in The Telegraph

The IEA’s Shadow Monetary Policy Committee has been quoted in The Daily Telegraph warning that the Bank of England risks overcorrecting for its failure to control post-COVID inflation by keeping interest rates too high.

The article said:

“For example, the Shadow MPC, run by the Institute of Economic Affairs, which keeps a close eye on the money supply (an indicator the experts at the Bank appear to disregard as an irrelevance) has been warning for some time of the risk of ‘overcorrecting’. 

“This week, one of its members pointed out that ‘almost every leading indicator has been pointing firmly downwards for some time, notably the monetary aggregates’. 

“The Shadow MPC wasn’t alone: many City economists have been fretting that, with the economy slowing sharply, the Bank may have kept rates too high for too long, and that risks pushing the UK into a completely unnecessary downturn.”

Read the full article here.