The Bank of England is a powerful organisation, which rarely hears criticism from insiders or outsiders because economists are quite polite people.
A leading economist I respect sent me these views on the communication of forward guidance, but did not want to be identified. I thought they deserved an airing. So in the style of the secret footballer, here the “secret economist” compares what senior BoE officials say about guidance with what they mean.
What we say … and what we mean
This is the right policy for a recovery … Please forget all that stuff about guidance is the right policy for an economy that is flat-lining.
We have made policy more effective …We can’t explain how. This statement sounds like code for a change in the stance of policy, but we don’t want to re-open that can of worms.