The Bank will retain the key element of the remit, its inflation target. There is a microscopic change of wording: whereas in the 1997 version the target is “2% at all times”, the new remit says the target of “2% applies at all times”.
Erm, yes, that is the sum total of changes to the official target. No new target, no nominal GDP measure, no radical departure. A minor re-wording.
The intention is to make it clearer that the 2% target is not prescriptive and that the Bank could veer away from it at all times as necessary.
More compellingly, it’s a subtle (or not so subtle) attempt to indicate that the Bank can provide even more accommodative policy (for which, read more QE) if it so wishes. It all comes back to George Osborne’s so-called “monetary activism”.
As the Bank of England has already accepted that inflation is unlikely to return to its two per cent target for three years (yesterday CPI hit 2.8 per cent), this changes seems less than radical.