BOE Should Use GDP Data to Set Monetary Policy, Institute Says
- Adam Smith Institute wants to scrap Monetary Policy Committee
- Report argues monetary policy should be set by system of rules
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The Bank of England should tie monetary policy to the total amount of spending in the economy and quantitative easing should replace interest rates as its main tool, according to a new research report.
In a call to scrap the Monetary Policy Committee and eventually remove the central bank’s power to set interest rates, the London-based Adam Smith Institute said the performance of nominal gross domestic product, which doesn’t strip out inflation, should become the focus of the Bank of England.