FRANKFURT (MNI) – Inflation expectations in the United Kingdom
remain firmly anchored, Bank of England Monetary Policy Committee member
Adam Posen said in an interview published Thursday.
Markets and people within the United Kingdom know that the central
bank will bring consumer price inflation back to 2%, Posen, an external
member of the policy-setting committee, told Austrian daily Der
Standard.
Although some people have been fooled and are buying gold, Posen
noted, “in reality inflation expectations are stable,” Posen assured.
In contrast to the chatter on markets, Posen said that “the
inflation expectations of people who invest on the market, in
inflation-linked government bonds or contracts on the pound, are still
firmly anchored.”
“The markets and people in Great Britain understand clearly that we
will bring the inflation rate back to its target of two percent,” he
emphasized.
The central banker also expressed skepticism about the role that a
central bank can play in popping asset or real estate bubbles.
“I am in favor of doing something against real estate bubbles, but
monetary policy is not the instrument for that.”
–Frankfurt Bureau; Tel: +49 69 720 142; email: tbuell@marketnews.com
[TOPICS: M$B$$$,M$$BE$,MABPR$,MT$$$$]