BoE policymaker wants officials to ‘think laterally about recovery’

<p>Ian McCafferty has suggested lateral thinking when it comes to bringing about an economic recovery.</p>

A Bank of England (BoE) policymaker has recommended officials think outside of the box about ways to support the UK financial recovery.

Ian McCafferty has indicated he may support fresh measures if needed in order to target certain weaknesses in the economy. He told Bloomberg Television that an "unorthodox means to conduct monetary policy" may need to be considered in the near future.

The decision-maker also noted that the BoE's current mandate is reasonably malleable and that a nominal gross domestic product target may only be of use as a temporary measure under "unusual circumstances".

When asked about the pound and whether he favours softening it to make UK products appear more attractive to foreign markets, Mr McCafferty stated that competitive currency devaluation in order to help exports is "self-defeating", as it encourages copycats overseas.

At 15:00 GMT, the pound plunged by 0.5 per cent in trading with the dollar to £1 buying $1.590, while it slipped by 0.1 per cent in trading with the euro to €1.194.

Learn about the markets and forex trading at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.