[Re: Carney’s new focus is spare capacity. Here’s what you need to know, yesterday]
Having clearly demonstrated that it is utterly incapable of producing credible forecasts for inflation, GDP, and unemployment, the Monetary Policy Committee is now going to determine policy based on something (spare capacity) that is not only unforecastable, but unmeasurable too.
How is the Bank’s focus on such a vague measure as spare capacity going to give the public and firms a clear idea for the trajectory of rates?
[Re: An independent Scotland should use the pound without England’s permission, yesterday]
Scotland could easily continue to use the pound without the Bank’s permission. Plenty of countries have done something similar. But all of them have one thing in common. They lose total control of their money supply, because they cannot print it or set its price through interest rates. If the Scots want to keep the pound, they will either have to relinquish total control of monetary policy to the Bank. Or if they want to have some influence on policy, they will have to relinquish a degree of fiscal control to Westminster.
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