The economic outlook: some remarks on monetary policy - speech by Paul Fisher

In a speech to contacts of the Bank’s Agency for Scotland, Paul Fisher – Executive Director Markets, member of the Monetary Policy Committee and member of the interim Financial Policy Committee - sets out his current thinking on monetary policy.
Published on 24 May 2011

The economic recovery has been characterised by slow growth and high inflation, a combination which Paul Fisher describes as posing a significant challenge for both policy makers, and businesses and households up and down the country. But he believes there was little monetary policy could have done to offset the various inflationary shocks that have hit over the past couple of years. “Given that changes in Bank Rate (or asset purchases) take a long time to have their full effect on the economy, monetary policy needs to be forward looking...”. “Trying to respond to every short-term movement in prices would probably be futile and would certainly involve a lot of unnecessary volatility.”

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