Inflation Targeting - Achievement and Challenges - speech by Rachel Lomax

In a speech today to the Bristol Society at the University of the West of England, Rachel Lomax - Deputy Governor responsible for monetary policy and a member of the Monetary Policy Committee - discusses the improvement in economic performance since the adoption of inflation targets and the challenges that policy makers now face.
Published on 18 February 2004

Speaking of the period since 1992, she comments that "Slightly miraculous as these developments may still seem to the generation that came of age during the Great Inflation of the 1970s … the happy fact is that for anyone in their mid-thirties, low inflation, steady growth and low interest rates are the norm." Monetary policy in the UK is now "a less melodramatic affair". The new framework has "taken the politics out of interest rate decisions without sacrificing democratic accountability". But the Deputy Governor doubts whether policy making has become easier. "Inflation targeting provides a credible framework within which ... complicated issues can be considered … but it does not change the need to make judgements or ... make [them] any easier."

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