Tuesday, June 23, 2009
Bank's Dale on inflation targeting
Posted by David Smith at 02:15 PM
Category: Thoughts and responses

In a speech to the Society of Business Economists, Spencer Dale, the Bank of England's chief economist, debated whether it would be helpful if the monetary policy committee (MPC) committed itself to keeping Bank rate at its present low level for a specified period.

He comes out against such a strategy, because circumstances can change quickly, while defending the inflation target - as Bank people tend to do these days. His broad conclusion is that interest rates aren't enough and that the Bank needs more weaponry. Also that mere "leaning against the wind" during the asset price boom years would not have been sufficient, or removed the need to take hard decisions. The speech is here.