We should give control of interest rates back to Downing Sreet

Handing control of interest rates to the Bank of England seemed like a great idea back in 1997. But not any more. Now it's time it was given back to Number 10, says Matthew Lynn.

History won't be kind to Gordon Brown either as chancellor or prime minister. He presided over a massive expansion of public spending, without having the courage to raise the taxes to pay for it all. He allowed a reckless expansion of credit and the financial system. He plotted ceaselessly against his colleagues, yet when he finally secured the top job he turned out to be hopeless at it.

Still, everyone seems agreed on one thing. He made a brave decision in giving an independent Bank of England (BoE) the power to set interest rates. It has, so the consensus runs, been a huge improvement over the bad old days when the chancellor set the rate charged for money. But is that really true?

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.