Chancellor George Osborne has announced an updated remit for the Bank of England's Monetary Policy Committee that may see the Bank issue "explicit forward guidance" on interest rates.
The new remit will retain the 2% inflation target but seeks to give incoming BoE governor Mark Carney more flexibility in his quest to support an economic recovery in the UK. The MPC is to investigate the feasibility of publishing forward guidance on interest rates, a move already employed by the US Federal Reserve, and will publish its findings in the August Inflation Report. "I want to make sure that an active monetary policy plays a full role in supporting the economy. "[The new remit] makes clear that the Committee may wish to issue explicit forward guidance, including using in...
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