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Deflation, driverless cars jump start new Bank of England blog

Published 19/06/2015, 15:20
© Reuters. An engraved door is seen on the outside of the Bank of England in the City of London

LONDON (Reuters) - Employees' thoughts on deflation and driverless cars have kicked off the Bank of England's first ever blog, which aims to shed more light on its inner workings.

Until now junior and mid-ranking BoE staff have had only vetted research articles through which to express their views, leading to accusations from lawmakers that any internal doubts about the bank's policies were being swept under the carpet.

Since taking office almost two years ago, Governor Mark Carney has said he wants to make the BoE more transparent, and he published more details of forecasts after a 2012 report said alternative views could get squeezed out.

The new blog does not allow the public to comment, however, and Friday's first posts are unlikely to ruffle many feathers.

Staff from the BoE's insurance regulation team look at how a widespread future adoption of driverless cars could affect the auto insurance market.

Liability might be taken by carmakers, leading to

a small number of contracts between them and insurers - described in passing as "hosting some of TV's most annoying adverts" - instead of millions of contracts with drivers.

On deflation, staff toe the party line, concluding that the risk of it persisting was very low, especially if policymakers were open to cutting interest rates.

Former BoE researcher Tony Yates said the blog marked a significant advance from his time there, when staff frequently avoided research topics that might have reached conclusions at odds with the views of senior officials.

Doubts about the effectiveness of quantitative easing following the financial crisis were, for instance, downplayed.

Although regional U.S. Federal Reserve banks had similar blogs, the BoE was the first national central bank to allow its researchers such freedom.

But while a "really positive step," Yates said it was too early to tell if the blog would give much space to dissent.

"It's quite easy when there isn't too much discord. But when multiple sides in a policy debate are at each other's throats, how they will manage staff is a different matter."

© Reuters. An engraved door is seen on the outside of the Bank of England in the City of London

* To read the blog, go to http://bankunderground.co.uk/

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