The Road to Recovery and the Inflation Target - speech by Paul Fisher

In a speech given today at the Annual Conference of the Coventry & Warwickshire Chamber of Commerce, which is discussing 'The Road to Recovery', Paul Fisher - Executive Director Markets and a member of the Monetary Policy Committee - looks at the events of the worldwide economic slowdown and the role and reaction of monetary policy.
Published on 12 June 2009

Paul Fisher cites a number of factors identified in the May Inflation Report that should support a recovery in the United Kingdom. He notes that there has been some better news on the economy more recently but cautions that '...we should not be complacent - there are likely to be bumps in the road ahead, with many twists and turns.' He goes on to explain the Monetary Policy Committee's expansion of the money supply through the issuance of central bank reserves and the Asset Purchase Facility. He describes how the effect of increasing the money supply can work through different channels, namely portfolio effects, bank lending, expectations and improved market function and then highlights some constraints the APF has to work within.

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