Some people say that words don't matter.
Others might say that playing around with them might not change much when we're in a total mess.
But I would disagree.
Words are there at times of crisis to say what really matters to us.
The Bank of England's mandate is the only real summary of economic policy that the U.K. has. And it says that all that matters is the prevention of the wealth of a few being depleted by inflation.
That never was a basis for running an economic policy.
It most certainly is not what we need now.
In this video I argue for an alternative.
And yes, I think a few words would make all the difference now.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Would help if you had bothered to read the Bank of England’s mandate before you posted a video where you get it totallly wrong.
https://www.bankofengland.co.uk/-/media/boe/files/letter/2020/chancellor-letter-11032020-mpc.pdf?la=en&hash=E7484EDAE2B60129273A0E37D222151737D4DCF2
I got it right
Price stability was made the pre-requisite – indeed only criteria – for all policy
It’s a shame you can’t read such documents
So when you said the target was to keep inflation under 2%, where the Bank of England say it is a symmetric target?
Or when you say in your video that there is nothing else to their mandate, nothing to do with growth or jobs or the economy?
They talk about it quite a lot.
You also don’t seem to realise that inflation hurts the poorest parts of society the most, not the richest. You seem think that the Bank of England controls inflation to protect the rich though.
Looks like you’ve actually got nothing right here.
The target is 2%
It is the only target they have
All the other words justify it
Try dealing in facts please
The target is 2%, and it is symmetric one. Not a maximum one as you have said.
Number of times Richard Murphy is wrong = 1.
It is not the only target they have. They have objectives to support growth and employment. They say price stability helps this, but also that inflation is allowed to deviate from the target for various reasons. They go into the details in the letter I posted, talking about government policy objectives and how the Bank should coordinate to support them.
Number of times Richard Murphy is wrong = 2.
Are you even capable of reading the Bank of England’s policy mandate? Or you do you just make things up as you go along and then pretend thats the truth?
The target is 2%
It is actually embedded in law
I’m right
They have no other targets because if they have tell me what they are?
If they have a growth rate target what it is?
If they have an employment rate target, what is it?
You can’t say, I know, because they do not exist
Just 2% does, and that’s the only goal they have to explain themselves against
Now stop wasting my time
There is no remit for the MPC on house price inflation, where increased property values is seen as ‘a good thing’ and is stimulated by government policy. The private rental market has cashed in through increased rents which reduces disposable income, and in some parts of the UK, the idea of buying a place to live is a distant dream for younger people.
Grace Blakeley did a paper on the subject for the IPPR, and Labour seems to be toying with it.
The 2% inflation target started in New Zealand from a ‘chance remark’!
https://www.nytimes.com/2014/12/21/upshot/of-kiwis-and-currencies-how-a-2-inflation-target-became-global-economic-gospel.html
Quite…
As a comment on the first part of the title (The UK’s in a total mess) for this, if not about the BoE, two things I came across this morning:
Firstly, a quote from C S Lewis’s Screwtape Letters:
“The greatest evil is not now done in those sordid “dens of crime” that Dickens loved to paint. It is not done even in concentration camps and labour camps. In those we see its final result. But it is conceived and ordered (moved, seconded, carried, and minuted) in clean, carpeted, warmed, and well-lighted offices, by quiet men with white collars and cut fingernails and smooth-shaven cheeks who do not need to raise their voice.”
And secondly, The Dissolution of the Austro-Hungarian Empire as a Model, at https://theamericansun.com/2020/06/30/the-dissolution-of-the-austro-hungarian-empire-as-a-model/ – presented as for the USA, but becoming equally relevent for the UK.