Forex Investment

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

LECEISTER (AFX) - Bank of England deputy governor Rachel Lomax today sought to manage market expectations for inflation, highlighting that the central bank will fulfil its duty of meeting the target rate over the medium term.

“We can and will keep inflation close to target on average. Short run deviations from the target should not leave anyone in any doubt about that,” she said in a speech marking the tenth anniversary of the central bank’s independence.

She also said the annual rate of CPI inflation will likely fall under the 2.0 pct target by the end of this year. After a rise to 3.0 pct in December, the CPI rate eased to 2.7 pct in January.

Still, the Monetary Policy Committee cannot work miracles and to some extent, has been a victim of it own success, she said.

“It is important that the unprecedented stability of the past decade does not lead people to believe that central banks can walk on water. They can’t,” she said.

Lomax repeatedly referred to the rise in the CPI annual rate to 3.0 pct in December as a “small movement” and criticized the “highly coloured media coverage” of the increase.

The media coverage may have had an unsettling effect on inflation expectations, a fact that the rate settling panel “can never afford to ignore”.

“Even a small movement in inflation away from target — one percentage point — has prompted some highly coloured media coverage, and may have unsettled people’s expectations about where inflation is headed in the short run.”

At the same time, measuring inflation expectations is no easy thing, after all “direct evidence of inflation expectations is very hard to come by; the measures we have are patchy and poor”, Lomax said.

The rate setting panel lifted borrowing costs unexpectedly in January, taking the benchmark refi rate to a 5-1/2 year high of 5.25 pct. One more quarter point hike this year is widely expected.

sivakumar.sithraputhran@thomson.com

ss/ss/am

COPYRIGHT

Copyright AFX News Limited 2007. All rights reserved.

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited

For more information and to contact AFX: www.afxnews.com and www.afxpress.com