Judging from some excited commentary, incoming Bank of England Governor Mark Carney will sweep away what remains of the inflation-targeting framework and embark on dramatic new easing designed to boost growth, cheered on by the Chancellor and with the rest of the MPC bending to his will. Mr Carney will, presumably, clarify his intentions at his Treasury select committee appearance tomorrow but such speculation may be poorly grounded, for three reasons.

First, Mr Carney’s record at the Bank of Canada cannot be described as dovish. Inflation has averaged less than 2% (1.8%) during his term as Governor and he has given no quarter to manufacturers complaining about a punishingly-high exchange rate. The Bank of Canada rejected the “low for long” mantra of the Federal Reserve and Bank of England in the wake of the financial crisis, raising the overnight target rate between May and September 2010 from 0.25% to 1.0%, a level at which it remains today.

Secondly, while Mr Carney discussed nominal GDP level targeting in speeches last year, the suggestion was that this should be employed only as a temporary measure in exceptional circumstances when inflation has undershot the target. The latter condition, of course, does not apply in the UK, where the consumer prices index is currently 7.4% above a level implied if inflation had averaged 2% since the target was switched to the CPI at end-2003.

Thirdly, Mr Carney remains strongly wedded to “flexible inflation targeting”, at least as practised in Canada, under normal economic circumstances. The success of this approach, however, hinges on longer-term inflation expectations remaining anchored to the target. Given the UK’s recent poor inflation track record, there is a high risk that a switch to a nominal GDP level objective, even if billed as temporary, would boost such expectations, a shift that could prove costly to reverse when economic conditions normalise.

Recent evidence, indeed, suggests that the inflation anchor is slipping. The median five-year-ahead inflation expectation in the Bank of England’s quarterly inflation attitudes survey rose to 3.6% in November 2012, the equal highest (with May 2012) since the relevant question was included in the survey in February 2009. Meanwhile, implied retail prices index (RPI) inflation in five years’ time derived from a comparison of conventional and index-linked gilt yields has climbed to 3.2%, the highest since May 2010 and above the long-run average of 2.9% – see chart. (A recent surge in implied inflation mainly reflects the decision by the National Statistician to retain the existing methodology for calculating the RPI, against expectations of a switch to formulae used in the CPI, which would have lowered RPI inflation significantly. This decision, however, cannot explain why the current level is high relative to history.)