ALEX BRUMMER: Time for a Bank of England rethink
Daily Mail There is a view that governments fiddle with central bank independence at their own risk. But with the current disruption on financial markets looking perilous, maybe it is time for a rethink.
What if the central bank itself is the cause of the instability and the institution admits that it has 'big lessons to learn' and its forecasting model is misfiring? The Bank of England has confessed to both.
The volatility in the gilts market, raising the cost of home ownership, is the result of a failure by Bank governor Andrew Bailey and the interest rate setting Monetary Policy Committee to get a grip on inflation.
When a Tory government feels the need to reach back to Ted Heath, the 1970s and a 'voluntary' prices policy on food essentials, one knows something serious is going on.
It is equally worrying when the Bank's chief economist Huw Pill, an experienced monetary official, says the Bank's forecasting model isn't working. That is not a surprise.
One doesn't have to be a sage to recognise that the Bank's projections have been wayward. As recently as November it was predicting the longest recession in UK history and we are still waiting.
