FXStreet (Mumbai) – In an interview with Mortgage Strategy on Wednesday, Bank of England (BOE) Monetary Policy Committee (MPC) member David Miles noted his views on the interest rate, just five weeks before the end of his second term.
As he speaks on his journey on MPC, he shares, 2009 was “a pretty horrendous year.”
He added, “There was a catastrophic collapse in confidence, employment and output in the first six months of the year and trying to use monetary policy to counter that was immensely difficult.”
“We got into a difficult situation again – less difficult, but still tricky – when by the end of 2011, inflation in the UK was above 5 per cent. We have an inflation target of 2 per cent and we were at 5.25 per cent in September of that year – so in a sense, to hold one’s nerve, keep interest rates very low and keep QE as a strategy was a pretty difficult decision.”
On inflation, he noted, “Inflation has come down quite significantly, we have seen a decent recovery in output and unemployment has fallen. None of that would have happened in quite the same way if in September 2011 we had reacted as a committee to high inflation by saying we have to tighten policy and put rates up.”
He further said, “We understand why that happened reasonably well and it seems to me very likely that we will move back up to target level quite sharply towards the end of this year or the start of next year.”
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