MPC 'still committed to meeting inflation targets'

23 September 2010

The UK's Monetary Policy Committee (MPC) remains committed to meeting inflation targets.

According to Spencer Dale, a member of the body and its chief economist, suggestions that Britain is planning to use inflation to dig it out of an economic hole are "dangerous talk".

Speaking at Cardiff Business School, the official condemned rumours that the MPC has "gone soft" on inflation, arguing that the committee must balance "upside and downside risks" to raising the level.

He added that the MPC must not lose its credibility when setting the rate, as a loss of this could lead to an aggressive tightening of monetary policy.

"The evils of inflation are well known. Dangerous talk has perhaps been partly fuelled by the behaviour of inflation in recent years," Mr Dale remarked.

Since March 2009, the Bank of England interest rate has been set at 0.5 per cent, with the next decision due to be announced on October 7th 2010.

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