Sunday Times: 'Falling inflation starts to ease Britain's misery'
Published 20 December 2011
An opinion piece by David Smith in the Sunday Times quotes research by Professor David Peel and colleagues in the Economics Department at Lancaster University Management School, which compares the decisions of the Bank of England's Monetary Policy Committee (MPC) with the 'shadow MPC' set up by the Institute of Economic Affairs.
“In 72 out of 90 votes compared, the decisions were identical. Most (59) were when the decision was to hold rates, but there was also agreement on 13 occasions when there was a rise or cut.
“The shadow MPC is more hawkish than the actual MPC and would not have cut rates so aggressively in response to the global crisis. It is also more activist and would have raised or lowered rates on more occasions. Given the actual MPC has held rates since March 2009, one of the longest periods of unchanged rates on record, perhaps that's not surprising.”