Financial scorecards ‘could help the public’

THE BANK of England (BoE) could send members of the public personalised scorecards to show how changes to interest rates and other policies have affected them, the central bank’s chief economist Andy Haldane said.

Mr Haldane, who has made headlines before by tackling radical subjects like the abolition of physical cash, said the BoE’s actions since the 2007-09 financial crisis had benefited British households.

The BoE and other major central banks slashed interest rates and pumped vast quantities of new money into the financial system in response to the global crisis.

Many people say lower interest rates have left them worse off, but Mr Haldane, who is originally from Guiseley, said the evidence showed very few households lost out as a result of the BoE’s decisions.

Mr Haldane said evidence suggested the average household gained around £1,500 each year from the BoE’s policies.

“My view is that there is a strong case for making, on a periodic basis, comprehensive and transparent assessments of the distributional impact of monetary policy,” Mr Haldane said in a speech for delivery at the University of Melbourne, Australia.

To aid public understanding, Mr Haldane suggested the BoE could produce a personalised scorecard to show how its policy was affecting individuals.

“Some scorecard-like device could, at times of significant change in the monetary policy stance, help explain, in simple terms, the personal as well as societal benefits monetary policy confers,” Mr Haldane said. “This should help make monetary policy relevant to people’s everyday lives.”

Interest rates were cut from more than 5 per cent to a thenrecord low 0.5 per cent between 2008 and 2009.