BoE's Lomax on Inflation Targeting

Speaking of the period since 1992, she comments that "Slightly miraculous as these developments may still seem to the generation that came of age during the Great Inflation of the 1970s ... the happy fact is that for anyone in their mid-thirties, low inflation, steady growth and low interest rates are the norm." Monetary policy in the UK is now "a less melodramatic affair". The new framework has "taken the politics out of interest rate decisions without sacrificing democratic accountability". But the Deputy Governor doubts whether policy making has become easier. "Inflation targeting provides a credible framework within which ... complicated issues can be considered ... but it does not change the need to make judgements or ... make [them] any easier."

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Speech by Rachel Lomax, Member of the Bank of England's Monetary Policy Committee to the Bristol Society at the University of West England, Bristol, 18 February 2004.

Inflation Targeting - Achievement and Challenges