In what direction will Mr Carney take the Bank?

Attention has quickly turned to what impact Mark Carney’s appointment as Governor of the Bank of England is likely to have on monetary policy. We are not convinced by arguments that he has demonstrated either a hawkish or a dovish bias at the Bank of Canada. But there may be some truth in suggestions that he will be open to taking a more flexible approach to targeting inflation. Ultimately, though, Mr Carney’s approach will be dictated by economic circumstances. If we are right in expecting the economy to struggle, then he will be forced to consider further unconventional policy options.