Bank of England Monetary Policy Committee member Kate Barker, in an interview with the Spectator, says that targetting inflation alone is not enough to ensure economic stability and policymakers could have paid more attention to monetary indicators.
Barker says “It happens that in the early years of inflation targetting, it did produce a stable economy. But I think it’s now clear that it can’t by itself produce a stable economy” adding “Do I think we should have perhaps looked a bit more at some of the money indicators? Yes, possibly that’s true.”
Barker also feels that the fall in the loan to value ratio of mortgages recently has been overdone and she expects house prices to rise again.
