- Asymmetric QE response function nudges us towards that fiscal danger zone
- Adds to concerns about the erosion of monetary policy independence
- This is the most dangerous moment inflation-targeting has so far faced
- Expects UK inflation to be nearer to 4% than 3%
- Policy may see a ‘Minsky moment’, a taper tantrum without the taper
- Even if just a risk, it is a risk that is rising fast and which is best managed ex-ante rather than responded to ex-post
BOE’s Haldane: The time calls for immediate thought, and action, on unwinding QE
