The Bank of England will not take instructions on its policies from politicians, its governor, Mark Carney, has said, just a week after Theresa May took a swipe at the impact of the Bank’s actions on “ordinary” people. At Friday’s meeting in Birmingham, Carney hinted that the Bank will let inflation overshoot its target – meaning rising prices for households – by keeping interest rates low. The Bank cut interest rates to a record low of 0.25% in August and has signalled it could cut again to around 0.1% by the end of this year. It will pick up even faster and we are likely to overshoot our 2% inflation target, perhaps sharply in the next two years.”Monetary policy has an enormous impact on politics. Speaking about the pound in Birmingham, Carney said: “We don’t target the exchange rate … But the exchange rate does matter for inflation.

Source: The Guardian October 14, 2016 18:45 UTC