Thursday, February 07, 2013
Carney sets out his stall
Posted by David Smith at 10:30 AM
Category: Thoughts and responses

Mark Carney, who will take over as Bank of England Governor on July 1, is giving evidence to the House of Commons Treasury committee. In the meantime, the Bank has published his written evidence, which is interesting.

Does he favour a change in the inflation target? He says the UK's (and Canada's) flexible inflation target has proved to be be "the most effective monetary policy framework implemented so far". He says the bar for change is very high but review and deb ate can be positive. His detailed evidence is here.

Carney's approach - so far - suggests he will be looking for consensus and will not be seeking to tear anything up too rapidly when he arrives at the Bank.

What kind of economy will he be presiding over? Manufacturing output rose by 1.6% in December, with overall industrial production up 1.1%. Though this did not change the GDP picture for the fourth quarter - down 0.3% - it left both above their fourth quarter average, by 0.8%-0.9% More here.

Meanwhile, the trade deficit narrowed from 3.6bn to 3.2bn in December.