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How Carney’s forward guidance dented Bank of England credibility

Central bank action takes around a year to feed through the system, yet the first incarnation of guidance lasted only six months

Mark Carney bustled into Threadneedle Street in July 2013 seemingly with the intention of stimulating the British economy. On August 7 last year the Bank’s rate-setting committee agreed to introduce “forward guidance”.

The policy did not even reach its first birthday intact. At best, it has achieved little. At worst, it has damaged the Bank's credibility.

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