The mixed legacy of an independent central bank

Everyone suddenly wants to claim credit for giving the Bank of England its independence. But it was hardly an original idea, and the bank's record is nothing to shout about, says Matthew Lynn.

All of a sudden, everyone seems to want to claim credit for giving the Bank of England its independence in 1997. In his memoirs, Tony Blair rather surprisingly said it was his idea all along. Until then, Gordon Brown had always insisted he thought of it. In response to Blair, the Labour leadership candidate Ed Balls popped up to say he'd had the idea first.

The debate is fairly infantile, as the idea of an independent central bank had been around for decades. The interesting point is that they all assume it was a triumph. In reality, 13 years on, the record is to put it mildly mixed.

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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.