The head of one of the City’s biggest money brokers today condemned Mark Carney’s idea that central banks should consider growth targets to boost the economy, and said it was “premature” to describe the incoming Bank of England Governor as “outstanding.”
Carney last week said central banks should ignore inflation targets in the event of slow growth and instead set themselves the task of raising national output. Many see his comments as a hint of his plans in this country.
But Terry Smith, chief executive of broker Tullett Prebon, said: “Central bankers should only concern themselves with sound money which includes inflation... Any targets other than those, such as promoting growth or employment, takes them into territory which should be reserved for elected politicians.” He added: “It is premature for George Osborne to have declared that Mr Carney is the outstanding, pre-eminent central banker of his generation.
“Carney has the advantage of youth. He has the disadvantage that he has never lived through a period of high inflation. But he may get to do so.”
