Monetary Policy

Truss’ calls for Bank of England review may be beneficial

Julian Jessop quoted in The Telegraph

Julian Jessop, IEA Economics Fellow, has been quoted in the Telegraph commenting on Liz Truss’ calls for a review of the Bank of England’s policy remit.

Referencing Julian’s recommendations for Truss’ policy agenda, the article reads:

“Julian Jessop (…) believes the Foreign Secretary has “no set idea of what the outcome [of the review] might be” and has “been careful not to prejudge” the process, meaning it can “look at best practice elsewhere”.”

“Jessop suggests Truss could move to a nominal GDP target (NGDP), under which the Bank sets interest rates to target growth in the cash size of the economy, covering both real GDP growth and inflation.”

“Jessop warns existing oversight of the Bank is weak, criticising the “wishy-washy” letters between the Governor and Chancellor, which “never seem to talk about the things that matter” when the target is missed by more than one percentage point.”

Read the full article here.