LONDON (Reuters) – Bank of England Deputy Governor Ben Broadbent said central banks should not ignore measures of money supply but claims that their quantitative easing (QE) bond-buying programmes led to excessive inflation are not backed up by evidence.
“No monetary policymaker should ignore information that’s relevant for future inflation. That includes the monetary aggregates,” Broadbent said in a speech on Tuesday to the National Institute of Economic and Social Research, a think tank.
“But like most economic data they need interpretation. Certainly the very strongest claims – that QE inevitably leads to rapid growth of commercial bank deposits (M4), on a par with that in the central bank’s balance sheet; and that this, in turn, inevitably leads to excessive inflation – are not well supported by the evidence,” he said.
(Reporting by David Milliken and Andy Bruce; Editing by William Schomberg)
