More Powers for Bank of England

More Powers for Bank of England.

Speculation is mounting both online and in national newspapers that George Osborne, Chancellor of the Exchequer, will legislate to give wider powers for managing the economy to the Bank of England in his budget in 20 March.

Currently, the Bank of England mainly has responsibility for control of money supply and to manage inflation.

Suggestions are being made that the Bank of England will also be given powers, targets to increase employment and stimulate the economy.

Our view

Mark Carney, the new bank of England governor designate has already suggested that the Britain should place less reliance on controlling inflation. We have been saying this for 5 years now that the Government will have to allow inflation to build over a sustained period to devalue its debt without ever repaying it.

Mr. Carney takes up his post on 1 July and we expect him to be offered wider powers to perform that economic miracle.

The UK needs stimulus and pressure mounts from all sides of the House of Commons as well as business leaders to do more. By giving power to the Bank of England it will mean politics is divorced from the argument and as such, the economy, or the flat economy, would no longer be blamed on failed economic policy of the Government.

Expect some budget moves to stimulate the economy.