Bank of England sets stage for maintaining easy monetary policy

The Bank of England set the stage for maintaining an easy monetary policy for some time to come in its latest quarterly Inflation Report.

The Bank of England continues to expect a “…a slow recovery in the level of economic activity” partially because “…it is likely that credit conditions will remain restrictive for some time and that the need to strengthen public and private sector finances will weigh on spending.”

Moreover, the BoE maintained its forecast for low inflation for the next three years claiming that “…it is more likely than not that inflation will be below the target [2%] for much of the forecast period, but the risks are broadly balanced by the end.” (The forecast ranges from -1% to 5%).

Bank of England Infation Forecast

Bank of England Infation Forecast

Given these conditions, the Bank of England will be in no rush to tighten (significantly) monetary policy anytime soon.

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