John McDonnell wants the Bank of England to target productivity growth to ‘reboot’ Britain

The Bank of England (BoE) should widen its remit to task itself with boosting Britain’s fledging productivity, the shadow chancellor John McDonnell has said.

Jeremy Corbyn’s number two said that if the Labour party won power it would consider asking the BoE to work on a three per cent productivity growth target, in what would mark one of the most radical economic policies towards the bank in decades.

Currently, the BoE’s main focus lies in keeping inflation to as close as two per cent as possible.

In a speech later today, McDonnell will say: “We want to build the economy of the future, and to do that we will need to reform the economic architecture of this country so that it is prepared to meet the challenges of this century.”

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The shadow chancellor is also expected to say that while he supports the BoE retaining its independence, the current financial system is not delivering investment across Britain.

“Our financial system right now isn’t fit for this purpose. We need one that helps deliver enough investment in the high-technology industries and firms so that we can reboot and rebuild Britain.”

Low levels of productivity has long been the UK’s Achilles heel, where it consistently lags behind trading partners such as the US, France and Germany.

Asking the BoE to consider productivity, if implemented, would be the most radical shakeup of the institution since former prime minister Tony Blair granted it independence from government in 1997.

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