The Bank of England does not normally say anything when there is no change in policy. This time, perhaps influenced by the presence of its new governor Mark Carney in London, it has issued a long statement. Bank Rate stayed at 0.5% and quantitative easing at £375 billion (though £6.6 billion of maturing gilts will be reinvested).
But the Bank has provided a long statement, part of which says it is “appropriate to look through the temporary, albeit protracted, period of above-target inflation. Attempting to bring inflation back to target sooner by removing the current policy stimulus more quickly than currently anticipated by financial markets would risk derailing the recovery and undershooting the inflation target in the medium term”. The statement is here.
This piece is cross-posted from David Smith’s Economics UK with permission.