A Tale of Two Shocks: Global Challenges for UK Moneatry Policy
8 Pages Posted: 20 Dec 2007
In this speech, Andrew Sentance, a member of the Monetary Policy Committee (MPC), discusses the challenges currently facing the MPC in assessing the impact of two major global shocks: rises in oil and other commodity prices, and the recent problems on financial markets. These shocks have potentially opposing impacts on inflation, so judging the appropriate monetary policy response will not be easy. The MPC will be watching economic indicators closely but will remain focused on its remit of keeping inflation on course to meet the 2 percent target, as experience shows that low and stable inflation provides a solid platform for healthy growth and a more stable economy over the longer term.
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