Operation of monetary policy

• Official interest rates remained unchanged during the third quarter.
• Markets revised down their expectations of UK inflation in the short term, and stopped anticipating an early increase in interest rates. But market expectations of inflation in the longer term remained well above the Government’s target.
• Sterling was relatively unaffected by sharp movements in the foreign exchange markets during the quarter, and appreciated slightly on balance.
• Gilt sales of £6.5 billion were made, but the September auction result was disappointing.

Operation of monetary policy