Bank of England’s mandate and role should urgently be reviewed
Christopher Snowdon quoted in City AM
Matthew Lesh writes for The Express
“The Bank of England has today announced a rate rise of 0.5 per cent, to 1.75 per cent. With inflation set to rise to 13 per cent and stay at 9 per cent into 2023, interest rates as low as this are clearly inadequate and we should expect further rises soon.
“The Bank and the Johnson government failed to act quickly enough to control this inflation, and the Bank of England’s mandate and role should now clearly be reviewed.
“The Chancellor continues to set the Bank of England a 2 per cent inflation target but the Bank continues to make little effort to keep inflation at that level, except on some vague long-term basis that involves “seeing through” notionally “short-term spikes” in inflation, where “short-term” apparently now means “two or more years” and “spikes” means inflation in the double digits. This should not be considered adequate.
“Control of the price level is a fundamental duty of government in a liberal market economy. The Johnson government has failed in that basic task. Hopefully, the new Prime Minister can do better.”
Notes to editors
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Further IEA reading:
IEA Shadow Monetary Policy Committee votes to raise interest rates to 1.75 per cent
Inflation: The next threat? by Dr Juan Castañeda and Professor Tim Congdon
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