The Governor of the Bank of England (BoE), Andrew Baileyis testifying alongside several members of the Monetary Policy Committee (MPC) on inflation and the economic outlook before the European Parliament’s Treasury Committee on Wednesday.
Read: Bailey Speech: On the exchange rate, there are dollar-specific factors at play
I don’t think that money supply is a direct indicator of inflation.
The direct relationship between money supply and inflation was broken years ago.
The inflation target is very important to the UK.
The UK’s inflation targeting regime has not failed.
I am confident that the BoE will respond to price shocks.
It is good to review the approach of central banks from time to time.
The review is not an admission that the BoE regime is failing.
Source: Fx Street