A lot more QE!!! Cable marked lower at 1.6185.

Do I see a deflationary rut anytime soon? No.

  • Risks are now that don’t yet see high CPI expectations crystalising, no need to address now
  • Fall in sterling was probably necessary given external imbalances
  • Happy for market to determine level of sterling provided don’t have excess volatility
  • We try neither to talk sterling up nor down
  • We’re a much more open economy, more subject to international price shocks than euro zone, US
  • If we saw more mid-term CPI sinking to deflation may consider more QE
  • We don’t start from a very great position, QE still very much on table as possible policy action