Central Banks
Thatcher Adviser Says BOE Is ‘Hopelessly’ Wrong on Inflation
- Tim Congdon says recession possible after money supply plunges
- Remarks clash with mainstream economists and BOE governor
The Bank of England in the City of London.
Photographer: Hollie Adams/BloombergThis article is for subscribers only.
Margaret Thatcher’s adviser on money supply said the Bank of England is making an error in identifying the war in Ukraine as one of the main drivers of inflation and that the UK is headed for a recession as a result.
“They’ve got it wrong — hopelessly so,” Tim Congdon, who advised Thatcher when she was prime minister and the Treasury after that, said Monday in an interview on Bloomberg Radio. His view is that excessive money supply is the cause of medium- and long-term inflation, and that a drop in lending now will trigger a sharp downturn in the economy.