Wednesday 07 August 2013 11:01 pm

Carney move sparks clash of opinions

THE BUSINESS GROUPS

JOHN CRIDLAND
CONFEDERATION OF BRITISH INDUSTRY
“This is a pro-growth statement with an important eye to inflation risks. Businesses will be buoyed by the support it should give to the economic recovery and be reassured by the built-in conditions around inflation and financial stability.”

GRAEME LEACH
INSTITUTE OF DIRECTORS
“We are very concerned at the use of monetary policy to chase an unemployment target. To get growth above two per cent on a sustained basis we need a productivity surge. And for that we need radical supply side reforms.”

THE MEMBERS OF PARLIAMENT

ED BALLS
LABOUR’S SHADOW CHANCELLOR
“We are seeing the governor show the leadership we have failed to see over the last three years and are still not seeing from the chancellor. But he is not a miracle worker and monetary policy cannot do the job alone.”

STEVE BAKER
CONSERVATIVE MP
“In the long term it’ll be very bad news, and usher in an era of Kremlinology – where we’re all looking at what the committee will do rather than at what’s happening in the markets. Kicking the can down the road is not in fact helping people.”

THE WESTMINSTER THINK TANKS

PHILIP BOOTH
INSTITUTE OF ECONOMIC AFFAIRS
“This is the most dangerous development in UK monetary policy since the late 1980s. To try to use monetary policy to reduce unemployment when inflation is already above target is playing with fire.”

SAM BOWMAN
ADAM SMITH INSTITUTE
“The ‘Carney Rule’ is definitely an improvement on the current regime. But what we really need is a truly rule-based system that uses market forecasts to create real stability. That system is nominal income targeting.”

THE BORROWERS AND THE SAVERS

BRIAN MURPHY
MORTGAGE ADVICE BUREAU
“Mark Carney looks like being a trusty ally for mortgage borrowers with this Inflation Report, which should prolong the golden age of fixed mortgage rates that we are currently experiencing. Even better mortgage offers will be heading our way.”

ROS ALTMANN
PENSIONS CAMPAIGNER
“We have had more than four years of emergency rates designed to fight depression. How much more help do borrowers need? It seems as if the inflation target is now 2.5 per cent, not two per cent. Real wages and savings are squeezed.”

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