BoE's Vlieghe: Policy will focus on returning inflation to target over medium term

The Bank of England's (BoE) monetary policy will focus on returning inflation sustainably to the target over the medium term, BoE policymaker Gertjan Vlieghe said on Monday, as reported by Reuters.

Additional takeaways

"Growth this year should not be viewed as a boom but as a return to normal."

"Temporary bottlenecks and base effects are likely to push UK inflation temporarily above target this year."

"QE cannot deliver a great amount of extra stimulus at a time of normal market conditions and low rates."

"There is significant uncertainty about whether furloughed workers will fully return to work."

"Neutral rate of interest is very very low relative to past decades."

"If UK economy does not grow very fast, significant spare capacity will open up when the furlough scheme ends."

"Stopping paying interest rates on boe reserves would not be consistent with the BoE's inflation control mandate."

"There is no trade-off between climate and inflation objective in boe mandate, inflation is primary."

Market reaction

The GBP/USD pair edges higher during the American trading hours and was last seen gaining 0.28% on the day at 1.4135.