Jacob Rees Mogg, on the Treasury Committee, which holds the Bank of England to account, has called for Mark Carney to be ‘fired’ for his handling of the discussion of the risk of a short term shock to the economy in the event that the country votes to Leave the EU.
This is a serious error.
For starters, Carney, as he ably explained on the Marr show on Sunday, was speaking entirely within the confines of his remit. The MPC have at their disposal a tool which acts with long and variable lags. And so they have to be prepared to act to head off future risks, of which the risk of Leaving is a clear example. Not only that, but decades of unsuccessful central bank opacity have convinced many – Carney notable in this regard for being so modern – that being open about these risks helps others avoid…
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