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BOE Awaiting Osborne Remit Ruling as QE Suspense Persists

Bank of England policy makers who voted to hold fire on stimulus yesterday will have more legitimacy to act in a month if Chancellor of the Exchequer George Osborne changes their remit and clears the path for more loosening.

Inflation that remains in breach of the BOE’s 2 percent target may have stayed officials’ hand before the March 20 budget, when the chancellor traditionally reaffirms the mandate. With Mark Carney having started a debate on new tools before he replaces Governor Mervyn King on July 1, Osborne may give the BOE license to act sooner by loosening its goal.