Bank of England: Inflation Target
Lord Peston (Labour)
My Lords, I accept that you would not make the Monetary Policy Committee independent if you did not want it to be independent but, none the less, is there not a serious problem? You do not have to be very clever or artful to bring inflation down if that is your target. The Tories demonstrated this marvellously in the early 1980s, when they came to power and doubled the unemployment rate, which they got to over 10 per cent and kept at a high rate for many years. The trick is not just to destroy inflation. Is not the test of your ability improvement in the real economy? Is the Minister aware that some of us, listening to the Governor of the Bank of England, are terrified of the lack of interest in the real economy, as it affects us now and in the near future?