Britain's finance minister cools on inflation target change: FT

PHOTO: Britain's finance minister cools on inflation target change: FT

LONDON - Britain's finance minister George Osborne is cooling to the idea of changing the Bank of England's inflation target to one focussed on the amount of spending, the Financial Times reported on Monday, citing unnamed officials at the Treasury, the UK's finance ministry.

According to the FT, Osborne still wants the new governor of the Bank of England, Mark Carney, to be more active in trying to put an end to Britain's economic woes, but there would be no need to target nominal gross domestic product.

Britain's economy shrank 0.3 per cent in the final quarter of 2012, prompting fears of a triple dip recession.

Osborne met Carney, who will take over as Bank of England governor later this year, at the World Economic Forum in Davos, Switzerland on Thursday amid concerns that Carney, a Canadian, had set up unrealistic expectations of a change in monetary policy in a speech he made in December, the FT reported.

On Saturday, Carney took a coordinated stance with Osborne to support doing more with the tools that the Bank of England already has at its disposal.

The Bank of England aims to maintain inflation at 2 per cent plus or minus 1 percentage point.