Monetary Policy Committee: Inflation

Debate between Lord Stern of Brentford and Lord Deighton

Wednesday 13th February 2013 Lords Chamber

[Lord Deighton]

My noble friend raises an important question: the technical unwind of the quantitative easing strategy, which is not something which would appear imminent. However when it does take place it will be done in full consultation with the Debt Management Office to ensure that we minimise any volatility to the gilt markets.

[Lord Stern of Brentford]

The Minister sees virtue in flexibility in monetary policy. Will he comment on the virtue of flexibility in fiscal policy?

[Lord Deighton]

The noble Lord is absolutely right to point out that there is an array of policy tools at our disposal. The unfortunate reality with respect to fiscal policy is that, given the enormous debts and deficit which we have had to contend with and have sought to consolidate, our room for manoeuvre is significantly diminished.