This report by ex MPC member Kate Barker criticises government plans to create a Financial Policy Committee at the Bank of England. It questions whether it is right to delegate new powers to the Bank to manage the overall financial stability of the UK, arguing that this should remain the responsibility of the Chancellor.

The report says the government's current approach to monetary policy pays too little attention to what went wrong in the lead up to the financial crisis. It says that the MPC should be required to look harder at longer term underlying imbalances in the economy, which would imply a move from a point target for inflation to a range.

The report commends the coalition government for creating the Office for Budget Responsibility, suggesting it has increased the credibility of fiscal policy, but urges the Chancellor to rethink his approach to deficit reduction if "self defeating" austerity is to be avoided.

Download the report.

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Click here to read Kate Barker's opinion article in the Financial Times.