While speaking at the policy panel at the European Central Bank (ECB) Forum on Central Banking in Sintra, Portugal, Bank of England Governor Mark Carney said that in exceptional circumstances, like Brexit, the Monetary Policy Committee (MPC) could extend the horizon over which it returns to the inflation target.
Key quotes (via Reuters)
- Says his comments at ECB panel have no bearing on BoE policy announcement on Thursday.
- It has been critical for the Bank of England to pursue flexible inflation targeting.
- Flexibility cannot be used without limit, MPC has set out framework for policy trade-off.
- Experience in euro area and UK shows how forward guidance can be effective in managing expectations.
- BoE retains the ability to relaunch term funding scheme as necessary.
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