The Tony Blair Institute for Global Change has launched a significant intervention in the economic policy debate, calling for a fundamental rethink of the Bank of England's approach to monetary policy.
In a major new report titled "A New National Purpose,'' the influential think tank argues that the UK's economic institutions have become overly focused on controlling inflation at the expense of promoting sustainable growth.
Time for a Growth-First Approach
The institute contends that both the Bank of England and the Office for Budget Responsibility (OBR) should be given revised mandates that explicitly prioritise long-term economic expansion. This represents a significant challenge to the current orthodoxy that has dominated UK economic policy for decades.
"We need our economic institutions to be focused on growth," the report states emphatically. "The Treasury, the OBR and the Bank of England should have growth as a primary objective."
Beyond Inflation Targeting
The analysis suggests that the current narrow focus on hitting the 2% inflation target has created a policy environment that inadvertently discourages productive investment and innovation. The institute proposes rebalancing the Bank's objectives to give equal weight to growth considerations.
This comes amid ongoing debate about the UK's persistently weak productivity growth and concerns that elevated interest rates are hampering business investment and economic development.
Broader Implications for Economic Governance
The think tank's recommendations extend beyond monetary policy to suggest a comprehensive overhaul of how economic success is measured and pursued in Britain:
- Revised mandates for key economic institutions
- Greater emphasis on long-term growth potential
- Improved coordination between fiscal and monetary policy
- More sophisticated measurement of economic progress beyond traditional metrics
The intervention from Tony Blair's institute adds substantial weight to growing calls for a post-Brexit economic strategy that moves beyond stability-focused approaches to actively drive expansion and improve Britain's competitive position globally.
