All in a good cause
THE GREAT and good cause of the day is independence for the Bank of England. It makes a fine rallying-cry, and this week a troop of the greatest and best, captained by the veteran banker Lord Roll, mustered to the cause. Their report (from the Centre for Economic Policy Research) says that the Bank should be responsible for sound money and for nothing else, and that it should answer not to the Government but to Parliament. So it would pick a target of inflation and set interest rates and set them so as to hit it: full stop. Goodbye to its 299- year-old job as banker to the Government — that could go, as Bonar Law once threat- ened, to the Midland Bank. Goodbye, pre- sumably, to everything else, like supervising banks and banging heads together in the City and teaching the Stock Exchange (after the Taurus debacle) how to exchange stocks. I would be happy to see the Bank with more freedom of action — and Parlia- ment, too — but they could evolve in that direction as they have evolved away from it without being demolished and rebuilt. I notice that the great and good would now leave the exchange rate to the markets their last good cause was the European exchange rate mechanism. As for the Bank, I am its wellwisher, which is not the same as wishing it what it wants.
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