What is the most effective boost for the UK economy?

René Defossez, fixed income strategist at Natixis, assesses the next steps for the UK economy.

For several years before the financial crisis, the Bank of England (BoE) could have been called the ‘high temple’ of inflation targeting, with governor Mervyn King a keen supporter of this strategy. In the post-crisis environment, however, the central bank has shifted its approach and is looking more aggressively towards other ideas to try and stimulate lending and growth. That is not to say the benchmark on inflation has proven ineffective. Since its introduction, inflation has been weaker and more stable in the UK. Also, such a strategy has lent added credibility and predictability ...