• Still big margin of spare capacity
  • More important than ever for BOE to be clear and transparent about policy to avoid unwarranted tightening in expectations
  • GDP not likely to regain pre-crisis highs until a year for now
  • Still significant slack in economy
  • Will not look to reduce stock of asset purchases until unemployment at least at 7%
  • Forward guidance will become void if economy gets hit by unknown events
  • Will be ready to increase QE if needed
  • 7% unemployment is not a trigger for rate rises or unwinding of QE but a waypoint for the MPC to judge how to decide policy
  • Sees unemployment at 7.4% is rates stay at 0.5% over 3 year period
  • Forward guidance does not promise low rates for a particular period and economic data will be the key
  • Understandable relief that UK has begun growing but much is still at stake in the recovery
  • Guidance is part of mixed strategy of QE, rates, FLS

Statement over. Onto Q&A.