BIRMINGHAM, UK (MNI) – Bank of England Monetary Policy Committee
Member Adam Posen says that the goal of a central bank is to
maintain price stability and that the BOE is “doing its best” to meet
its inflation mandate.
“Our goal is price stability … It is not a central bank’s job to
lower inflation,” Posen said.
Following a highly academic speech on economic divergence in
currency unions, Posen said:
“Our goal is price stability, not low inflation per se….in
practice you need the inflation a little above the zero level in order
to prevent there being a lot of lock-ups in the economy.”
Data released earlier this week has heaped pressure on the BOE,
with many commentators warning that the MPC risks losing credibility.
Consumer prices rose at their fastest monthly pace on record in
December, as the price of transport and food increased at their highest
rates ever, figures released by National Statistics showed Tuesday.
Consumer prices rose by 1% between November and December and were
up 3.7% on the year, dwarfing the previous record monthly increase of
0.6%. The outturn was also well above the median forecast for a rise of
0.7% on the month and 3.4% on the year.
–London newsroom: 4420 7 862 7492; email: wwilkes@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]
