2019
Chapter
Renewing our Monetary Vows: Open Letters to the Governor of the Bank of England

Monetary Policy—‘Whatever It Takes within Our (New?) Mandate’

Format:Print

Abstract

This paper discusses whether the UK's monetary policy framework needs to be reviewed in the light of experience during and in the aftermath of the global financial crisis. It concludes that, while the inflation targeting framework has generally proved robust, the Bank of England's monetary policy strategy needs to be updated along two dimensions: (1) to better reflect the accumulation of monetary, financial, and macroeconomic imbalances that have implications for inflation at longer horizons than the two-year forecast horizon upon which inflation targeting central banks typically focus and (2) to introduce limits to the use of quasi-fiscal balance sheet measures by central banks so as to maintain the credibility, independence, and effectiveness of monetary policy.

Keywords

Monetary Policy; Money; Policy; United Kingdom

Citation

Pill, Huw. "Monetary Policy—‘Whatever It Takes within Our (New?) Mandate’." Chap. 3 in Renewing our Monetary Vows: Open Letters to the Governor of the Bank of England, edited by Richard Barwell and Jagjit Chadha, 35–52. London: National Institute of Economic and Social Research (NIESR), 2019.