• As likely to undershoot inflation target as overshoot
  • Risk that high inflation will push up inflation expectations
  • Risk spare capacity will push CPI below target once temporary factors fade
  • Calls for grand bargain on exchange rates, capital controls, realigning demand
  • Unless imbalances dealt with, risk of economic collapse due to protectionism

No clear signs on QE from these comments other than the reference to spare capacity i the economy…

EUR/GBP is falling with EUR/USD, helping keep a slight bid under the cable, relatively speaking. It’s still falling, just not as fast as EUR/USD…IOt now trades at 1.5710 from 1.5682/85 lows.