More attention needed on monetary quantities

Fiscal strategy: Members of the public take a break in the sunshine outside the BoE headquarters in London. The bank will unwind its quantitative easing carefully, making interest rates its main monetary policy tool. — AFP

LONDON: Central banks need to pay more attention to how the money supply affects inflation, the economy and their own policy-transmission mechanisms, Bank of England (BoE) chief economist Huw Pill says.

In a speech to the Walter Eucken Institut in Germany, Pill said more work was needed on “how monetary variables can help keep inflation at target sustainably and credibly over the medium term.”