Should we worry about “Corbynomics”?

If the polls are anything to go by, left-leaning Jeremy Corbyn will be elected as the next leader of the Labour Party on 12^th of September. This has prompted a heated debate over his economic policies – so called “Corbynomics”. “People’s QE” in particular has come under intense scrutiny.

Whilst increasing public infrastructure is undoubtedly a good thing, financing it by forcing the Bank of England to print money and therefore abandoning central bank independence, is clearly not. In any case, with borrowing costs so low there is no good reason why the government couldn’t increase investment spending through traditional channels. However, there are still four and a half years until the next election and so we would take any proposals now with a generous pinch of salt. Accordingly, it is too soon to be worrying about “Corbynomics”.