Former MPC official urges Labour to give BoE powers to set inflation target

Sushil Wadhwani's recommendations

Labour has the chance to reduce the higher inflation risk premium in the UK by surrendering control of setting the country’s inflation target to the Bank of England, a former rate-setter has said.

Former UK central banker and ex-Monetary Policy Committee member Sushil Wadhwani has urged the new Labour government to "take advantage of its large majority and push through this change as it would signal that they were serious about entrenching price stability".  Writing in a Centre for Economic Policy Research paper on Monday (22 July), Wadhwani suggested that goal independence could be "a game changer".  BoE chief economist Huw Pill dents hopes for a rate cut due to 'persistent' inflation Unlike other major central banks such as the Federal Reserve and the ECB, the BoE does not...