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- Title
Keeping the party under control--anniversary comments on monetary policy.
- Abstract
In this speech to the British Hospitality Association,(1) Rachel Lomax, Deputy Governor responsible for monetary policy, looks back at her first year on the MPC. She argues that the UK economy emerged from the recent world slowdown with less slack than other economies. That is the key reason why the United Kingdom was the first to start raising interest rates when activity picked up last year. While it was right for the MPC to take early action to contain inflationary pressures, uncertainty about how consumers would react to higher rates, and a desire to avoid springing surprises, have been important reasons for tightening policy gradually. Noting that the housing market is a key risk to a benign central forecast, she argues that the MPC cannot ignore the influence of house prices on domestic demand; and while the link has been weaker recently than in the past, it is unsafe to conclude that consumers would shrug off the effects of a sharp downturn in the housing market.
- Subjects
UNITED Kingdom; MONETARY policy; ECONOMIC policy; LOMAX, Rachel; HOSPITALITY industry associations; HOME prices; HOUSING market
- Publication
Bank of England Quarterly Bulletin, 2004, Vol 44, Issue 3, p352
- ISSN
0005-5166
- Publication type
Article