Letters to the Editor - 13/02 - Confused guidance, Scottish sterling, Best of Twitter

Confused guidance

[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.

Chris Quin

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?

Owen Jackson

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Scottish sterling

[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.

Name withheld

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BEST OF TWITTER

The Bank’s guidelines don’t change our view that the first rate rise will come third quarter 2015.
@EY_ITEMClub

Glad Carney abandoned unemployment target. It’s a lagging indicator that reflects backwards.
@rosaltmann

Greatest threat to UK recovery: visceral anti-business political rhetoric ahead of election. Prenez-garde!
@truemagic68

German government raises GDP forecast from 1.7 per cent to 1.8. Growth expected to accelerate to 2 in 2015.
@MarkitEconomics