16 Feb

Deputy governor suggests further rate action is warranted

Deputy governor suggests further rate action is warranted

The Bank of England is likely to need to take further action to deal with the threat of inflation falling too low, its deputy governor Charles Bean has commented.

Addressing the National Farmers Union in Birmingham, Professor Bean - a member of the rate-setting monetary policy committee (MPC) - said the consumer prices index measure of inflation is likely to fall below its two per cent target in the spring and then run "well below" that level for a substantial period of time.

He added that the MPC "will probably need to take further action to return inflation to target in the medium term".

Further reductions below the current one per cent base rate could help lower the cost of mortgages.

Minutes of this month's MPC meeting - at which the base rate was trimmed by 0.5 per cent - will be published on February 18th, revealing how Professor Bean and each of his colleagues voted.
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