How the Bank lost the plot

The Bank was warned that the growth in new money would cause prices to jump

TWO YEARS AGO THE Bank of England had just published its May 2021 Monetary Policy Report. It was signed by every member of the Bank’s Monetary Policy Committee and was the Committee’s most substantial and authoritative view of inflation over the medium term. From the date of the Report’s publication, it envisaged a brief phase of strong growth and “modestly” above-target inflation but thereafter, “growth and inflation fall back, with inflation around the target [of 2 per cent] two and three years ahead”. In the MPC’s judgement, the delivery of on-target inflation would coincide with steady growth of national output and occur with little change in interest rates. According to a table in its May 2021 Report, the Bank rate would be 0.3 per cent and 0.6 per cent in…

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The Critic (Digital) - 1 Issue, July 2023

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