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Monetary Policy
Publication year - 2014
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.12063
Subject(s) - monetary policy , economics , unemployment , point (geometry) , unemployment rate , monetary economics , central bank , forward guidance , macroeconomics , inflation targeting , credit channel , geometry , mathematics
We are fast approaching the point at which the Monetary Policy Committee (MPC) will have to make a decision about the future of its forward guidance policy. The policy had been intended to reassure households, firms and markets that Bank Rate would remain at 0.5% for a prolonged period. However, the economy and, in particular the labour market, have improved so quickly that unemployment will reach the 7% threshold within the next few months, more than two years earlier than the Bank had forecast when it introduced forward guidance…