The Bank of England should stop worrying about inflation
As the government makes growth its top priority, one critical lever risks being overlooked: monetary policy. Ministers are busy wrestling with fiscal constraints and the pressures of a sluggish economy, but too much focus remains on spending pledges and supply-side fixes, and too little on the frameworks that shape demand and investment. Ahead of this week’s Spring Statement, they must ask a harder question: is the Bank of England’s inflation-targeting regime now holding back Britain’s recovery? The Bank of England remains bound to its rigid 2 per cent inflation target As I argue in my new Institute of Economic Affairs paper, Rethinking Monetary Policy, inflation targeting is no longer fit for
