–King: Prepared To Move Monetary Policy In Either Direction
–Sentance: Time To Ease Off The Accelerator; Policy Setting Extreme
LONDON (MNI) – It’s right for the Bank of England’s Monetary Policy
Committee to keep its foot firmly on the “monetary accelerator” in order
to stimulate the economy, Governor Mervyn King told the Treasury Select
Committee Wednesday.
King also told the TSC that the MPC was facing a difficult
judgement balancing the inflation risks, and it stood ready to move
policy in either direction. The MPC is divided, with Andrew Sentance
telling the TSC it was time to ease off on the monetary accelerator.
Asked if he was arguing that the MPC should take further
stimulative action King said “I am arguing that we have room to use
monetary policy in either direction.”
“I don’t want to prejudge where it (policy) will need to go he
said, adding the MPC was prepared to move policy “in either direction,
as seems appropriate.”
MPC member Sentance, who has backed a rate hike, said “The policy
setting we have got at the moment is quite extreme,” with Bank Rate at
an historic low of just 0.5%.
–London newsroom 0044 20 78627491; email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MT$$$$]
