Labour could order biggest shakeup of Bank of England remit in decades

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The Labour Party is considering asking the Bank of England to target productivity to help boost the economy if it wins power, in what would be the most radical change to the central bank’s remit in over two decades.

Consultants commissioned by John McDonnell, the shadow chancellor, recommended the bank should retain its independence, but that its mandate be expanded to include a productivity growth target of 3 percent.

Currently the bank’s main economic focus is keeping inflation as close to 2 percent as possible. McDonnell will also say in a speech on Wednesday that commercial banks have distorted the economy and that the current financial system is not delivering investment across Britain.

We “want to build the economy of the future, and to do that we will need to reform the economic architecture of our country so that it is prepared to meet the challenges of this century,” McDonnell will say, according to extracts released in advance…

Read more : Reuters, 20.06.2018