"It is always dangerous to have one specific metric in place upon which to manage interest rate movements and, given the Bank of England does not have the best record of hitting its own metrics, it is therefore a wise move that the Governor has rethought this.
"This recovery from recession is different from others in that we are seeing poor levels of real wage growth and in some regions they are still falling. There is still fragility in the recovery, for example while improving levels of employment is good news, people still feel affordability is an issue. When the Funding for Lending Scheme and other government stimuli are curtailed, it is uncertain how this will affect confidence in the recovery.
"That said, house prices continue to rise in some parts of the UK, which is more a question of lack of supply interacting with some growth in demand and cheap mortgages. The Bank of England needs to keep an open mind and not be too focused on trying to predict the markets too far into the future."
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