Last December, in a Bank of England (BoE) speech entitled the ‘Spectre of Monetarism’(1), its governor Mark Carney said that ‘over the past decade real earnings have grown at the slowest rate since the mid-19th Century’. To evidence this statement, the BoE published the chart below:
The Bank’s decision to keep interest rates at 0.25% last week may seem like business as usual. But there’s nothing normal about the way that monetary policy is operating at the moment. The longer the rates remain as low as they are, the more obvious it becomes that they’re no longer an effective monetary policy tool.
In response to the Bank of England’s announcement that it will keep interest rates at 0.25%, Fran Boait, executive director of Positive Money said:
The Office of Budget Responsibility (OBR) - the government’s fiscal watchdog – has released a ‘Fiscal Risk Report’. Positive Money welcomes its in-depth analysis, but we are concerned with its central findings.