- no need to add to stimulus to boost prices
- low inflation might turn slightly negative but far from deflation trap
- low inflation reduces needs for , and the effectivesness of, unconventional policy
BOE Miles again, this time speaking in Edinburgh in a speech entitled “What can monetary policy do?”
Full text here
In concluding, David considers the case for broadening the aims of monetary policy and finds that any such move would be ‘unwise’. ‘Flexible inflation targeting is not inconsistent with attaching significant weight to short term fluctuations in output and employment.’ Longer to medium term targets for economic activity are a different matter. ‘Either those other targets are consistent with an inflation target – in which case achieving the inflation target is likely to require that output and employment over the medium term do not drift away from them – or they are not. If they are consistent then there is nothing much to be gained by adding them to the inflation target.
GBPUSD still flirting around 1.15150 but seems to have some support for the moment
BOE’s Miles – no rush to raise interest rates
