BoE Urged to Find New Weapons to Fight Recession

The new governor of the Bank of England and the chancellor need to take early action to ensure the central bank has weapons it can deploy when the next recession hits, warn economists, the Financial Times reported. A survey conducted by the Financial Times last month illustrates economists’ waning faith in the power of monetary policymakers to fight a downturn. A majority of the more than 85 respondents thought the UK economy would fare no better this year than it did in 2019, when growth slowed to its lowest level in a decade. But virtually no one expected more than a small adjustment in interest rates. Many survey respondents urged the incoming governor to follow the lead of the US Federal Reserve and European Central Bank and undertake a root and branch review of the BoE’s strategy, policy tools and communication — while noting that any change in the bank’s remit would be a political decision. Read more