New Bank governor considers scrapping inflation targeting

Incoming Bank of England governor Mark Carney has suggested struggling economies dump inflation targeting in order to kick-start growth.

Carney, the current Bank of Canada governor who takes over from Sir Mervyn King next June, said central bankers should consider committing to low interest rates in order to boost economies, even when inflation picked up. According to the Telegraph, he said in a speech: "To achieve a better path for the economy over time, a central bank may need to commit credibly to maintaining highly accommodative policy even after the economy and, potentially, inflation picks up." The UK is currently wedded to an inflation target of 2% for Consumer Prices Index (CPI) inflation but over the past five...