Andrew Sentance, who was on the MPC from 2006-2011, says Carney shouldn’t take any action in his first 100 days as BOE leader.
Carney should be predominantly in listening, observing and learning mode. Coming from Canada, his main challenge will be to familiarise himself with the British economy, the operation of the UK financial system and the views of key stakeholders. He should get out and about – both in the regions and in the City – and use the media to communicate the view that he is seeking to understand the challenges which the UK economy and financial system are currently facing as the basis for his actions over the next five years.
Inside the Bank, he should initiate a total overhaul of the Bank’s Inflation Forecast and Inflation Report process. The Bank’s recent forecasting performance has been poor and it has been far too optimistic on inflation.
Sentance was a lousy central banker and this is lousy advice. Carney needs to kick-start the moribund UK economy with action. A walk in the English countryside isn’t going to give him insight on how to cure the economy.
