Bank of England Deputy Ben Broadbent attacks Theresa May as rift with Downing Street widensComments Off on Bank of England Deputy Ben Broadbent attacks Theresa May as rift with Downing Street widens
The chilly relations between the Bank of England and Downing Street grew colder still today as Deputy Governor Ben Broadbent launched a thinly veiled attack on critics of its ultra-loose monetary policy.
The latest shot comes after Prime Minister Theresa May sparked an open season on the central bank with a strongly worded conference speech last month, criticising the “bad side-effects” of ultra-low interest rates and quantitative easing, boosting owners of assets but hitting savers.
Governor Mark Carney said this week that MPs were engaged in a “massive blame-deflection exercise” by fingering monetary policy for more fundamental shifts.
Broadbent argued that the real — inflation-adjusted — prices of assets such as shares and housing had “basically been flat over the past 10 years”, although house prices tripled in the decade to 2005, increasing wealth disparity long before the crisis and the Bank’s emergency measures.
“When it comes to these distributional matters I see much less of a link to monetary policy,” he said.
“And the only reason for raising these issues, therefore, is the concern that the opposite is true — that looser monetary policy, unconventional policy in particular, is having material and lasting effects on the distribution of wealth,” he added.