"Flexible inflation targeting, in my opinion, is the most successful monetary policy framework that has been in existence"
- Incoming BoE's governor Mark Carney
The Bank of England agreed on Thursday to freeze its key interest rate and maintained the level of its quantitative easing cash stimulus, despite the fact the country is facing the risk of a triple-dip recession. The benchmark interest rate remained unchanged at a record low of 0.50%, where it has stood since March 2009. The U.K. policymakers also maintained the size of the bank's programme of asset purchases at 375 billion pounds ($587.6 billion). At the same time, incoming BoE's governor Mark Carney has said he is open to reviewing the U.K.'s monetary policy framework. The BoE also said that the overall economic activity in Britain had been flat over the past year, despite the economy shrinking 0.3% in the last quarter of 2012, adding to concerns that that the economy could be heading for the third recession in five years.
"Flexible inflation targeting, in my opinion, is the most successful monetary policy framework that has been in existence. And so the bar for change to that framework, the overall framework, is very high," said Mark Carney, who replaces Sir Mervyn King in July. "But I would note that there seems to be an appetite for some debate about what exactly the framework is, and what alternatives could be to it, and that should be encouraged."
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