Monetary Policy

The MPC shouldn’t dwell on today’s inflation figures


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Commenting on the announcement that the UK inflation rate fell to 0.5% in December, Professor Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:

“The fall in inflation to 0.5% should neither be a cause for concern nor a reason to loosen monetary policy. The main reason for the fall in inflation is the collapse in oil prices and intensified competition in the retail sector.

“This is good news for consumers but they are also “one-off” factors which are unlikely to be repeated during late 2015. The MPC needs to look beyond the present and consider the outlook for inflation in the medium term.”

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Notes to editors:

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.



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