Should the UK really ditch inflation target?

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The incoming Bank of England governor Mark Carney has sparked speculation he will push for the removal of the UK's CPI inflation target if the mediocre recovery in the UK takes another tumble, but is it a good plan?

The current Bank of Canada governor (pictured), who will replace Sir Mervyn King in June, this week alluded to controversial plans to scrap the inflation target, shifting the focus instead to kickstarting the flagging economy. During a speech at the Chartered Financial Analyst Society in Toronto, Carney hinted at plans for a radical policy change, which could include ditching the 2% CPI target. Meanwhile, yesterday the Chancellor George Osborne told MPs he would be open to the possibility of scrapping the inflation target in favour of a growth-based remit. The comments have alread...

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