|Bank of England has 'no new toys to play with' to boost economy
|The Bank of England has "no new toys to play with" to boost the economy, rate-setter Paul Fisher has said, despite being handed a more flexible remit by Chancellor George Osborne last month.
Mr Fisher, a member of Bank's Monetary Policy Committee, said that the new remit, which gives it more room to loosen monetary policy by focusing on growth as well as a 2pc inflation target, did not give the Bank powers to fix the economy.
"There are limits to what monetary policy can do. Nobody has actually given us any new toys to play with in terms of trying to promote the economy," he told the Scottish Herald.
Mr Fisher said the committee would respond to the "more flexible" remit in the August inflation report, once new governor Mark Carney takes over from Sir Mervyn King, who retires in June.
Mr Fisher has voted for a £25bn increase to the Bank of England's quantitative easing programme for the past five months. His calls for more QE were backed by Sir Mervyn and fellow rate-setter David Miles at February and March's meeting.
They argued that more QE would help the British economy to "avoid potentially lasting destruction of productive capacity and increases in unemployment."
Mr Fisher said: "My view is we need some sort of background level of QE to see us through this period, particularly while FLS has its full impact for the remainder of this year."
Beyond that, Mr Fisher said, "I don't know whether it would have a huge impact.
"We have the most expansionist monetary policy in 300 years ... the question is do we do a little bit more or not, when you have already done so much and the economy is where it is?"
However, he added that Britain's economy had shown "glimmers of hope" after two years of stagnation. Mr Fisher said that weak growth in Britain's services and manufacturing sectors had been held back by North Sea oil production.
"I expect North Sea oil at least to bottom out shortly and possibly start increasing and construction to be no worse than flat – that would in itself lead to some pick-up in GDP numbers."
Economists have argued that had it not been for continued weak North Sea oil and gas extraction data, Britain would have avoided a double-dip recession in April last year.
Mr Fisher also defended the Bank's actions amid criticism that QE cripples pensioners by reducing annuity rates. "The recession has hit the vast majority of people, not specifically savers or pensioners," said Mr Fisher.
"We have done some work on the effects of QE on pensioners, and if you have had a pension throughout linked to the price index you have probably done better than most workers... pensioners as a group have done relatively well."