LONDON (Reuters) - The Bank of England’s Monetary Policy Committee should have the power to decide on new financial instruments to combat inflation, BoE policymaker Adam Posen was quoted as saying on Monday.
“I really feel the MPC does have to have the authority to make up its mind on what instruments it wants to use and not be constrained by either the BoE executives saying, ‘We don’t want to do x’ or ‘That’s the financial policy committee’s territory’,” the Financial Times quoted Posen as saying.
Posen said the BoE could be more effective in fostering economic recovery with access to other instruments to keep inflation close to its 2 percent target.
“I have no question in my mind that what we’re doing with QE is preventing things from getting much worse, but that doesn’t mean you couldn’t have an additional or better instrument,” he said.
Posen, an outgoing member of the Bank’s MPC, challenged the view of central bankers that only elected governments can buy private-sector assets.
“I personally view the teeth-gnashing and garment-rending about what’s fiscal and monetary as too much drama for too little content,” he said.
The Bank of England launched a third round of quantitative easing asset purchases in July in an attempt to stimulate the economy.
Reporting by Stephen Mangan; editing by Christopher Wilson