- Though recent surveys suggest brighter picture for activity, spending cuts, export weakness and tight credit conditions are headwinds
- For much of 2012, likely to get zigzag of positive and negative quarterly growth due to jubilee holidays
- Disruptions to oil supply from Iran or Nigeria would pose upward risk to inflation
- No easy remedy for rebalancing economy, raising rates now would cause recession
- Limit to what monetary policy can achieve when real adjustments are required
- No one can fully prepare for unforeseeable consequences of Greek default
- Making contingency plans, will not go into detail
- Effect of QE on money supply may not be visible until Q1 or Q2
- We do not believe that asset purchases exhibit diminishing returns
- But there can be a limit to how much monetary policy can do
- More than any other advanced economy, we have put in place conditions to rebalance economy
- Latest unemployment figures consistent with broader economy
- Should not underestimate impact of automatic stabilisers in UK fiscal policy
- Particularly valuable to make supply side reforms now
- Last few years has raised questions about whether inflation targeting sufficient
- On its own, inflation targeting is not sufficient as did not stop financial crisis
- Relative to many continental banks we have moved a long way in making bank system healthier
Reuters reporting.
Good old Merve, in a lovely cheerful mood today
