Federal Reserve Docet. The Bank of England follows its US counterpart as an example and decides to maintain the current ultra-expansionary policy, from interest rates at 0,50% to asset purchases, until unemployment reaches 7%, from the current 7,8%. He will then “reevaluate the situation”.
Governor Marc Carney specified that there is no commitment or promise: "The path (of interest rates) will always depend on the economic situation." It must be said that the material that the BoE has presented to the market (over 100 pages of analysis) paints a scenario in which it seems possible (always with some uncertainty) that unemployment could return to 7% between 2014 and 2015. The worst scenario sees a 9% still in 2016, the best instead a 7% by the end of the year.
However, the new policy will have to respect the inflation targeting strategy: the 7% threshold will vanish into thin air if the idea prevails that inflation, within 18/24 months, could exceed the 0,5% target by at least 2 percentage points (today it is 2,9%). If inflation expectations are no longer anchored sufficiently at 2% or if the Financial Policy Committee (a body of the Bank of England itself) assesses that the monetary policy stance threatens financial stability, the governor's policy will be reassessed.
