The UK Treasury Select Committee has opened an inquiry into the effectiveness and impact of BOE monetary policy since 2008
Chairman of the committee announced the inquiry with this;
"Interest rates are stuck near zero, the Bank of England has used increasingly unconventional forms of quantitative easing, and inflation has been below the two per cent target for three years.
The efficacy of monetary policy or otherwise, its unintended consequences, and its prospects, need careful examination.
The Treasury Committee will continue to act as a safeguard on the operational independence of the Bank. The Treasury indemnity, which underpins parts of the Bank's monetary policy, could all too easily encourage the Treasury, or politicians, to put undue pressure on the Bank. The Committee will examine the risks of that, too."
To help form the inquiry, they wish to receive submissions on the following;
The effectiveness of monetary policy in meeting the inflation target
- The effectiveness of holding Bank rate near zero and whether extremely low rates can encourage more, rather than less, saving
- The effectiveness of quantitative easing and whether it has met with diminishing returns
- The scope for further expansion of "qualitative easing" (e.g. corporate bond purchases)
- Whether forward guidance effectively binds the Bank to a policy course, and the desirability of doing so
The unintended consequences of monetary policy
- The impact on asset-price inflation, the housing market and financial stability
- The implications for the long-term sustainability of pensions and savings income
- The distributional impact
- The impact on competition, "zombie companies" and productivity
- The effects on the structure of relative prices in capital and commodity markets and the consequences for capital allocation, productivity and the trade cycle
- The implications of a large balance sheet and the Treasury indemnity for Bank accountability and its relationship with the government and other agencies
- The use of macro-prudential, fiscal and other policy to counterbalance any unintended consequences of monetary policy
The prospects for monetary policy
- The drivers behind and prospects for low real interest rates in the UK and globally
- What is the significance for monetary policy of rises in bond yields since the US election?
- The impact and trade-offs of tightening monetary policy in the near-term
- Whether monetary policy is currently out of ammunition for the next crisis
- Options for raising the "natural rate" of interest (e.g. fiscal policy, promoting investment)
The deadline for submissions is 5th March 2017 so an actual hearing will be sometime after that. I'm not sure if that will happen the same time as Carney's usual testimony appearances to the committee or separately. Either way, Carney may have a few more hot coals to be dragged over.
I'm also not sure of their bias on this given the picture they've attached to the announcement.
