Future central bankers in the UK will have to deal with a compromised Bank of England following the government’s intervention in Mark Carney’s management of monetary policy, according to a leading critic of Bank of England policy.
Anthony Evans, an economist at ESCP Europe business School in London, says that the government has overstepped its remit in questioning Mr Carney’s decisions – with some members calling for his resignation.
“The government has effectively reminded Mr Carney that he answers to them – and that is a dangerous mistake. He has responded robustly, and it is unlikely that this will affect how he runs his office – but I believe that this has compromised the position for future central bankers in the UK, with the independence of the central bank being questioned so openly.”
“To call for his resignation is unwarranted – in making forecasts he was only doing his job. Personally, I think that his forecasts are overly gloomy, but he must have absolute independence to make calls as he sees them, or the future efficacy of the Bank of England as an independent body will be questionable. The whole point of the central bank as an independent voice is defeated if policy makers can influence it.”