Leading broker attacks new Bank of England Governor's plan for growth targets

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The Independent Online

The head of one of the City's biggest money brokers has condemned Mark Carney's idea that central banks should consider growth targets in order to boost the economy, and said that it was "premature" to describe the incoming Bank of England Governor as "outstanding".

Mr Carney last week said central banks should be prepared to ignore inflation targets in the event of slow growth and instead set themselves the task of raising national output. He said he was not referring to the UK's economy, but many saw his comments as a hint of his plans in this country.

But Terry Smith, the chief executive of the broker Tullett Prebon, said: "Central bankers should only concern themselves with sound money which includes inflation and, if they have got the authority to regulate it, the safety of the financial system.

"Any targets other than those, such as promoting growth or employment, takes them into territory which should be reserved for elected politicians."

He added: "It is premature for George Osborne to have declared that Mr Carney is the outstanding, pre-eminent central banker of his generation. Canada's good performance during the credit crisis cannot be attributed to him as he only became Governor in 2008, by which time the die was well and truly cast.

"Carney has the advantage of youth. He has the disadvantage that he has never lived through a period of high inflation. But he may get to do so."