Carney Should Make the Bank of England an Innovator

July 5 (Bloomberg) -- Speculation that Mark Carney, whotook charge at the Bank of England this week, might radicallychange U.K. monetary policy cooled in the months after hisappointment was announced. No doubt, this softening ofexpectations was justified -- the constraints of the office aretighter than the new governor and his admirers would like. It’sa pity though. Carney should stay ambitious. Monetary policycould stand some innovation, and not just in Britain.

The new governor is known to favor clearer “forwardguidance” on policy, of the kind the Federal Reserve has beentrying to use. The first policy announcement on his watch thisweek left interest rates and asset purchases unchanged, but toldmarkets that interest rates might stay low for longer than theyexpect. The pound weakened (presumably as intended) as a result.