It's hard to fault
Predictably, the governor insisted that there had been no flip-flopping.
Consistent? Really? Are we talking about the same Bank? Yes, we are. The one that used its May inflation report to point out that there was spare capacity in the economy that needed to be used up before borrowing costs were raised. The one that since Carney's Mansion House speech just 29 days later has been sending out the message that rates might go up sooner than markets think. And the one, judging by Carney's evidence to the Treasury committee, that is now back to pointing out how nugatory real earnings growth is a sign of slack in the labour market.
What is clear is that Carney and his fellow MPC members have left the City entirely baffled. What's also clear is that what happens to official interest rates is now entirely dependent on the incoming economic data. This is a recipe for volatility, precisely the opposite of the Bank's avowed policy.
Indeed, as the first anniversary of Carney's arrival at the Bank nears, his main policy initiative - forward guidance - lies dead in the water. In truth he has turned the clock back to the days when the MPC's approach was to assume that the future was unknowable and that the interest-rate decision had to be judged afresh each month.
So what, then, is the difference between monetary policy under
Most Popular Stories
- Criminal Investigation Opened Into James Foley's Death
- McDonald's Names Another U.S. President
- Sahara Casino Rises Anew as SLS Las Vegas
- U.S. Supporters of Islamic State Get Close Scrutiny
- The Hip New Career? Farming
- Job Market Shifts Complicate Yellen's Rate Decision
- Deere Announces New Round of Layoffs
- Chinese Coal Gas Boom Poses Climate Risks
- Dems Losing Fear of Obamacare
- Swiss Suicide Tourism Doubled Since 2009