Who else laughed at hearing Labour now want to make the Bank of England accountable for the UK financial state

Question

Is this government now a complete farce ? Is it not in the governments remit to ensure the stability of the country's financial state ? Or are the government simply raising their hands and saying they are not capable ?

Answer 1

The independence of the Bank of England as a blame avoidance measure ?  

Well they're not all that independent - they have a mandate to set interest rates based on a strict set of criteria - ie to keep inflation at its target level of 2% based on the CPI measure of inflation which they moved to because it stripped Housing out of the equation for the bank.  

Because Housing was out of the equation they set their interest rates accordingly and the boom in that sector was allowed to continue unchecked.  

However now that Housing is falling in value equally they are not part of the way the bank sets interest rates and officially they should be looking to raise interest rates to curb inflation.

Luckily Mr King isn't stupid and really is doing the best that is possible under his remit.  The problem was that the government prevented him from acting to deflate the Housing market bubble sooner - before the credit crisis started.

He isn't to blame.

Answer 2

I think you may have missed the point.  The Governors responsibility to report to the Prime Minister of the day was a requirement from the day the control over interest rates was given to the bank.

It is not a new thing.  It is just that it has become necessary for the first time.

Your question is a ludicrous and wildly inaccurate over-statement of the facts.

Answer 3

Not very bright, are you?

Read this: http://www.hm-treasury.gov.uk/documents/...

Edit:

So, you'd really trust a bunch of MPs who are only in it for themselves to be global financial experts? I don't think so...

What next? Let *your* local MP set mortgage interest rates where *you* live?

Answer 4

I stopped laughing at this Government a long time ago.  It scares me to death.

Answer 5

The Bank of England has had the power to change the interest rate to help the economy for over ten years now, that's why Mervyn King has to write a letter every month when the inflation rate is above 3%.