Letters to the Editor - 16/05 - Monetary dark age, Best of Twitter

Monetary dark age

[Re: The real world looks much less rosy than the Bank of England’s forecasts, yesterday]

This is a dark age for macroeconomics. The likes of Mark Carney are concerned with communication but have forgotten that the maximum impact of an interest rate increase occurs within 12-18 months. If this is appreciated, then the Bank is saying that, with unemployment declining at a rate of 1 percentage point a year, it can continue with ultra loose monetary policy until late 2016 (with the actual hike in spring 2015). This is borderline crazy as, at the current trajectory, unemployment in late 2016 will be less than 5 per cent.

Name withheld

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