In most of the developed world, central banks are free to set monetary policy without the interference of those who depend on voters for their employment. That independence, though, is "not set in stone," as former Federal Reserve Chairman Alan Greenspan noted in his September 2007 memoirs. And there are worrying signs that, against the current backdrop of record-low interest rates, politicians are tempted to start meddling.
The latest attack on independence comes from a very unlikely source. In an article for the Telegraph newspaper published on Tuesday, former U.K. Foreign Secretary William Hague, now Lord Hague of Richmond, wrote that "central bankers have collectively lost the plot. They must raise interest rates or face their doom."
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