The May Inflation Report was understandably dominated by the debate about the economics of Brexit.
I thought that the BoE ducked a chance to be transparent about the consequences of a vote to Leave. It chose to condition its forecast on a vote to Remain. Carney linked this to a long-standing – but actually not always wholly adhered to – policy of ‘conditioning on government policy’.
Taking Carney’s words at face value, the Bank have not even produced a forecast conditioned on a Leave vote, so there was no forecast to communicate.
I find this hard to defend.
Charles Evans of the Fed’s FOMC spoke earlier in the year about how, in the vicinity of the zero bound, an increase in the uncertainty about the future state of the world warrants a precautionary loosening.
The likelihood of being wrong about the future increases on either side. But the costs for…
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Utopia, you are standing in it! 
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