‘Forward guidance’: new monetary policy instrument or esoteric fad?

In August 2013, the Bank of England adopted a new monetary policy known as ‘forward guidance’. This paper sheds light on this landmark moment and this rather obscure policy instrument. The authors unpack the rationale of this policy, its implementation modality and provide international evidence on its impact. Important questions are then raised about whether this policy is needed in the UK, and about the downsides of this seemingly innocuous monetary experiment. Publisher statement: This is an Accepted Manuscript of an article published by Taylor & Francis in Public Money & Management on 13th May 2015, available online: http://www.tandfonline.com/10.1080/09540962.2015.1047272