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Dear Mr Carney... Memos to the New Bank of England Governor

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Dear Mr Carney…:

Wage settlements are subdued, and more than 2.5 million people are out of work in the UK: thus the top priority for the Bank of England has to be to boost aggregate demand.

With possibilities for expanded government spending blocked by the ideological fundamentalism of the parliamentary majority, the interest rates the Bank of England controls at rock-bottom, and quantitative easing of unknown effectiveness, only one obvious lever remains: the exchange rate.

It is time for the governor to announce that a (somewhat) weaker pound is in Britain’s (short-run) interest--and to make it so.