LONDON, July 6 (MNI) – The following are key recent comments from
each of the nine Bank of England Monetary Policy Committee members.

MPC Members Evidence to the Treasury Select Committee on June 28:

BOE Deputy Governor for Financial Stability PAUL TUCKER:

On Quantitative Easing

“I am concerned that you, and the people listening, could gain the
impression that this is a committee which is uniformly drifting in the
direction of thinking more stimulus may be needed.”

“Now more stimulus may be needed. Bad things can happen and if bad
things happen that don’t threaten an upward drift in inflation then
maybe we will have to provide further stimulus. But the threshold, for
me, for that would be high.”

On inflation and inflation expectations:

“I am one of those who, from the back end of last year, has worried
about the possibility of an upward drift in inflation expectations.”

“The longer inflation remains so high the more likely it is
that when we say ‘Oh, it’s a one-off factor, it’s another one-off
factor,’ people in this country will think ‘They use the sentence
it’s a one-off factor and a one-off event in a completely different way
from anyone normal'”.

MPC member DAVID MILES:

On QE and the eurozone peripheral crisis:

“Presumably there’s a possibility of (the eurozone crisis) playing
out badly and having a negative knock-on impact on demand in the UK.”

“If that were to happen, or indeed some of the other risks to
demand output in the UK were to materialise, that would make it much
more likely that I would vote for asset purchases because we would want
to offset that … If we didn’t do that the path of likely future
inflation … would move down, because unemployment would be greater.”

BOE Governor MERVYN KING:

On why the MPC has not sanctioned more QE

“I think it would, albeit in very much more difficult
circumstances than most in the past, be another example where we would
be accused of having taken the easy option and hence made more
difficult the ability to get low inflation in the medium term.”

On policy and high inflation outturns:

“Our task is to meet the remit set by you (parliament) and that
remit does allow for us not to try to bring inflation back to the target
immediately if that would lead to undesirable volatility of output,” he
said.

“I think most of us on the committee have taken the view that to
tighten policy now would be to risk that.”

BOE MPC member ADAM POSEN:

On the May Inflation Report (IR) and monetary policy:

“I expect consumption to be even weaker than is already in the IR,
I expect wage growth to be weaker than is already in the committee
forecast, and I do not expect any meaningful drift upwards in inflation
expectations to translate into exchange rate movements or interest rate
movements.”

“It seems to me the policy is insufficiently stimulative and we
should be doing more.”

BOE Chief Economist SPENCER DALE, in written evidence to the TSC:

“There is a risk that this sustained period of above-target
inflation will lead to further upward pressure on prices, either because
some households and businesses come to expect elevated inflation to
persist or if the squeeze on households’ real incomes leads to higher
pay growth. In addition, there is a risk that continued strong global
growth, especially in emerging economies, may increase the upward
pressure on import prices, particularly those of commodities.”

BOE Executive Director Markets PAUL FISHER’S speech and Q and A to
the Global Borrowers and Investment Forum, June 21:

On setting policy in response to a series of price shocks:

“Given the nature and timing of the shocks, I would argue that the
best we can do with monetary policy is accept the initial impact and
then to gently steer inflation back to target in the medium term.”

“I believe the MPC is charting the right course through these
difficult times.”

Q and A:

On more QE:

“It always starts with our medium-term assessment of inflation,
it’d be if we saw that sinking down toward deflation territory is I
think where asset purchases would come in. What would cause that to
happen would be a sudden tip-over in growth now and that it is a risk.”

BOE MPC Member MARTIN WEALE, speech to the Finance Directors’
Strategy Meeting, June 13:

“The May Inflation Report forecast sets out clearly that there is a
need for monetary policy to tighten. Arguments can be produced for
delaying the start of that tightening process. But there are significant
risks to delay … (A rate hike will) reduce the speculation that the
Bank has departed from its inflation mandate.”

BOE Deputy Governor CHARLES BEAN, speech to the Northern Ireland
Chamber of Commerce, May 19:

“The MPC’s chosen approach has been to accept a temporary period of
above-target inflation, rather than seeking to hold inflation as close
to the 2% target as possible at all times.”

BOE MPC member BEN BROADBENT, at TSC confirmation hearing, May 17:

“I think there are still huge risks in both directions and that is
why you have had a split vote for quite a long time.”

Asked if he felt nearer to the hawks or the doves:

“Sometimes one; sometimes the other, possibly. I don’t think I have
always been in the same direction. It has been more of a second order
judgment. If I have had any difference with what you might call the
middle, it has been about the communication, possibly. On the broad
thrust of policy, I think I would have followed pretty much what the
Bank has done.”

–London Bureau; Tel: +442078627491; email: drobinson@marketnews.com

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