Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Carney hints at scrapping inflation targets in aggressive push for growth

1 Comment
Carney hints at scrapping inflation targets in aggressive push for growth

Incoming Bank of England governor Mark Carney has hinted at scrapping inflation targeting.

In a speech set to re-write the central banking rule book, Carney (pictured) broached the idea of taking more aggressive action to boost ailing economies.

He will take over from Mervyn King next year, who in June steps down as the Bank of England governor.

'To achieve a better path for the economy over time, a central bank may need to commit credibly to maintaining highly accommodative policy even after the economy and, potentially, if inflation picks up,' Carney said, in an address to the CFA Institute in Toronto.

'To "tie its hands" a central bank could publicly announce precise numerical thresholds for inflation and unemployment that must be met before reducing stimulus.  If yet further stimulus was required, the policy framework itself would likely have to be changed.

Carney added: 'For example adopting a nominal GDP level target could in many respects be more powerful than employing thresholds under flexible inflation targeting.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: what's behind the second oil crash?

Brewin's Gutteridge: what's behind the second oil crash?

This week Brewin Dolphin's research head talks to Will Riley, co-manager of the Guinness Global Energy fund, about what next for oil.  

Play AA-rated Bullas: what drove my UK small cap outperformance

AA-rated Bullas: what drove my UK small cap outperformance

AA-rated Richard Bullas has quietly been making a name for himself at the helm of the Franklin UK Smaller Companies fund.

Play Sector spotlight: how Harwood's Philbin is playing emerging markets

Sector spotlight: how Harwood's Philbin is playing emerging markets

Emerging markets have been a rollercoaster for investors, but amid the doom there have been have been bright spots, such as India. 

Your Business: Cover Star Club

Profile: CHI's bond supremo on liquidity and bond risk management

Profile: CHI's bond supremo on liquidity and bond risk management

'Some people have been extremely complacent about rate rise risk. Myself, I wish they would just get on with it.'

Wealth Manager on Twitter