Setting UK Monetary Policy in a Global Context - speech by Andrew Sentance

In a speech to the European Policy Forum in London, Andrew Sentance - External Member of the Monetary Policy Committee - discusses the global forces that affect UK inflation and how monetary policy can respond to them. He questions the extent to which UK inflation is driven by the domestic output gap relative to global influences on demand and pricing.
Published on 24 January 2011

Andrew Sentance argues that the United Kingdom's experience of the financial crisis and its aftermath has challenged both the view that monetary policy can keep economies on a steady growth and low inflation track at all times and the notion of a simple trade-off between growth and inflation. He argues that the openness of the UK economy to international trade and investment means that "...the international dimension is a key ingredient to the setting of UK monetary policy".

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