The Governor of the Bank of England, Andrew Bailey, recently received an email from a member of the public begging him to "Please, please, please lighten up." According to The Economist, the best he could come up with was: But we are in difficult times. ”He is not kidding. For the first time since the poll began in 1999, more people are dissatisfied with the Bank of Japan's performance than satisfied. And the “political environment” has become more “hostile” than ever. The front-runner is the next Prime Minister Liz, who is Truss, who attacks banks with excessive money printing and "suggests that their powers should be strengthened."
When he announced the biggest rate hike in 25 years, even by his own standards, Bailey presented a "very apocalyptic economic outlook," says Marcus his Ashworth Bloomberg. After the Truss campaign accused banks of ``trying to push Britain into recession,'' commerce secretary Kwasi Kwarten warned that ``something was wrong'' on Threadneedle Street, adding to tensions, Tony says.・Diver is The Daily Telegraph. If plans surface, the bank could be told to abandon his 2% inflation target and be ordered to target nominal GDP (the size of the economy in cash equivalents) instead. It sounds like a minor tweak, but it actually spells a "fundamental" overhaul.
There is no doubt that the BoE needs it, he said Ambrose Evans-Pritchard in The Daily Telegraph. Whatever the new model truss suggests, there is "nothing worse" than the "corrupt New Keynesian fallacy dog dinner" currently dictating BoE policy. By worshiping the altar of 'inflation expectations' and ignoring money supply signals, banks vastly underestimated the danger ofinflation. Now, just as the inflation cycle has "already rolled over" and the threat is receding, we are exacerbating the error with a "double-decker"interest raterise.
But there are actually many reasons to keep the status quo, Valentina Romei told FT: A record of hitting the mandated inflation target. Moreover, the government's call for a review is likely to raise 'questions about the BoE's independence', which is sure to unnerve investors. Truss' "frankly bizarre proposal that the World Bank should target the money supply makes little sense to anyone who remembers the lessons of the 1980s," an economistsaid. rice field. That is, "the relationship between the money supply and inflation is too volatile for it to work". In such circumstances, "sensible politicians should be grateful for the banks' monetary policy independence" and "leave them alone to make unpopular decisions".
