Is inflation targeting yesterday's success story?

The problem now for the Bank of England, this article suggests, is that the achievement of low and stable inflation may have become a little too easy. Inflation targeting may work very well in puncturing a bubble of inflationary expectations, but what happens when inflationary expectations fall in line with the central bank's target?

First published by the Independent, 13 October. The author, Stephen King, is managing director of economics at HSBC.

Don't you think it's rather fortunate that Gordon

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