QE and asset price bubbles

JP45

This may be veering a little off topic (as it doesen't directly relate to QE), but one thing I would like to see in the future is for the Bank of England to pay much closer attention to credit-fuelled asset price bubbles, regardless of their impact on the usual CPI/RPI measures of inflation.

I think I'm right in saying that the Bank's current targeted measure of inflation, CPI, takes no (direct) account of asset price inflation such as housing or shares. That to me seems something of an oversight, given the potential consequences of asset price bubbles.

After all, it's no coincidence (as a recent report from the Bank for International Settlements pointed out) that the high income countries that had the biggest credit booms and asset bubbles - Ireland, Spain, the UK and US - are the ones that have suffered the biggest jumps in public deficits and debts.