[spot5050]

The Bank of England target for inflation is 2%.

Often their 2% target is incorrectly reported as being an upper limit; in fact it's a symmetrical target, ie. 1.5% is just as good or bad as 2.5%.

They had a meeting at the start of the month, and even though inflation was 2% and rising they decided that the best thing to do was reduce the base rate from 4.75% to 4.5%.

Today the inflation figure was published. It was higher than their 2% target but also higher than they expected; 2.3%, up from 2% in June. (They estimate that 1.3% of the rise was due to crude oil.)

The BoE statement accompanying their 4th August decision stated;
$this->bbcode_second_pass_quote('BoE MPC', 'B')ut, in the Committee's view, the slackening in the pressure of demand on supply capacity should lead to some moderation in inflation. Against that background, the Committee judged that a decrease of 0.25 percentage points in the repo rate to 4.5% was necessary to keep CPI inflation on track to meet the 2% target in the medium term.

[jaws]

$this->bbcode_second_pass_quote('spot5050', 'W')e seem to have a Monetary Policy Committee who are more concerned with keeping retailers happy than controlling the money supply.