The Committee agreed that, in such circumstances, changing short-term interest rates might not be an effective monetary lever and as such, there was a serous danger of deflation. The Committee called on the Bank of England to consider other methods of controlling monetary policy, by targeting monetary aggregates more directly and implementing debt buybacks.
The Committee also noted that there was a wide divergence between the inflation measure the Bank of England is targeting and wider measures. It might be time to reconsider which inflation measure is targeted. There is a danger of general deflation in the economy as a whole resulting from targeting a measure of inflation that is distorted upwards.
The minutes of the meeting can be viewed here.
Minutes of the meetings of all 2002 and 2003 Shadow Monetary Policy Committee meetings are available from SMPC section.
The Shadow Monetary Policy Committee, which has shadowed the MPC since its creation, has no relationship with the recently formed Times Shadow Monetary Policy Committee