BBC News reports that Labour is to review the Bank of England’s mandate as part of proposals for a wide-ranging shake-up of the UK’s economy if the party wins power. The newly appointed Shadow chancellor John McDonnell is reported to have said that the Bank had continually missed its inflation targets and needed a more “rounded” focus in determining monetary policy. It is also reported that the told the BBC that the Bank’s policymaking should take other factors such as economic growth and investment into account. At the moment, the Bank of England’s mandate is to deliver price stability, focusing on delivering inflation of 2{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}. The Governor must write to the government every time the target is missed by 1{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} on either side. However, inflation is currently close to 0{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} and has not been within the target band since October 2014.
In his first speech as shadow chancellor to the Labour Party conference, it is widely expected that he will push for a “Robin Hood tax” on stock and foreign exchange market trading. Chancellor George Osborne has fought moves to introduce such a tax, warning it would harm the financial sector but Mr McDonnell believes it could rein in the excesses of the City and help pay for improvements to the NHS and other public service
He will also set out arguments for “new economics” in his address and say £25bn of an estimated £120bn in unpaid corporate tax can be recovered.