The Bank of England must explain the financial impact of monetary policy on society to aid the British public understand its decisions , chief economist Andy Haldane has said.
Haldane has proposed a "monetary policy scorecard summarising the impact of monetary actions on particular cohorts" in response to concerns that zero-interest rates and £435bn of quantitative easing since the financial crisis have fuelled greater inequality.
Haldane said that a third of the public believe that low interest rates have made them worse off, and whilst fiscal policy, the government's tax and spending plans are subjected to regular distributional analysis, monetary policy is not.
"My view is that there is a strong case for making, on a periodic basis, comprehensive and transparent assessments of the distributional impact of monetary policy. This would help people understand the purpose and impact of monetary policy, both on the economy in general and on them as individuals, on 'their GDP", he said.
"Greater transparency of this type would not, by itself, reduce any distributional effects of policy. But it could help in explaining the impact of these actions, in a localised and personalised way, as a means of improving understanding and trust in central banks. Both have been a casualty of the crisis."
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