King Says New Stimulus Prompted by Downside Inflation Risk
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Bank of England Governor Mervyn King said policy makers added stimulus this month because they judged that there was a “downside” risk of inflation slowing too far beyond the 2 percent goal.
“The committee’s best collective judgment is that CPI inflation will continue to fall back to around the target by the end of 2012,” King said in a letter to Chancellor of the Exchequer George Osborne released by the central bank in London today. Officials decided this month that “in the absence of further policy action, the balance of risks around the inflation target in the medium term lay to the downside.”