When Gordon Brown made the Bank of England independent he still had one ace up his sleeve. He chooses the nine members who make up the Interest rate setting Monetary Policy Committee. Some say that even that should change, and that the selection should be down to an independent panel, – which of course begs the question, who would choose the members of the independent panel.
Up to now, the Bank of England has kept largely quiet on the issue. But tensions are mounting, or so it would appear.
The committee is supposed to have nine members, it’s currently down to seven. Although, as one member, David Walton, tragically died last week, this lack of numbers is not entirely the fault of Gordon.
But the criticisms mount. A recent appointee, David Blanchflower, is based in the US, and has to fly over to Blightey every time the MPC meets. Some say that he can’t really make a qualified judgement about the UK, given his US economic lineage. On the other hand, maybe, he can take a more objective view.
But now, Bank of England governor, Mervyn King, has spoken out, and yesterday he did something unprecedented. He criticised the chancellor saying: “We have something that is informal and seems to result in appointments being made at the last minute. I don’t think anyone benefits from that. I would expect a more systematic process.”
© Investment & Business News 2013