MPC member defends U-turns

CHARLES GOODHART, a member of the Monetary Policy Committee (MPC), last night hit out at media criticism of apparent about-turns in thinking, such as that which followed the MPC's decision to raise interest rates in June.

Mr Goodhart argued that fear of criticism pushed policy-makers into "excessive caution". He said: "There is an absolute yawning gap between the general perception of non-economist outsiders that reversals of policy are to be deplored as evidence of error and general incompetence, and the apparent findings of our economic models that such reversals should optimally occur some four times more frequently than they do in practice."