Lords call for greater accountability of Bank of England to parliament
The report found the Bank of England has made 'errors in the conduct of monetary policy in recent years'.
The Making an independent Bank of England work better report, released today (27 November), found that the BoE, alongside other central banks, has made «errors in the conduct of monetary policy in recent years».
Bank of England looks to other central banks in forecasting review
It added that a «perceived lack of intellectual diversity» at the BoE contributed to insufficient challenging of its modelling and forecasts; and with its remit growing, there are risks jeopardising the central bank's ability to focus on its primary objects and drawing it into the government's wider policy agenda.
This was due to the fact that its remit expansion was not met with an increase in accountability and scrutiny by parliament.
Although the report reiterated the BoE should remain independent to reassure markets and so that «critically important economic decisions» are delegated to unelected officials, the committee shared concerns over a «democratic deficit» within the central bank, putting confidence in the bank and its independence at risk.
Additionally, the report found the continued use of quantitative easing has «blurred the lines between monetary policy and fiscal policy».
As a result, the economic affairs committee put forward three key recommendations.
It suggested the Treasury should «prune» the BoE's wider remit, focusing on the matters it is expected to consider, to ensure the central bank prioritises tackling inflation and financial stability, alongside a review of the BoE's management structure in a bid to streamline it.
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The second recommendation
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