Charlie Bean, deputy governor of the Bank of England, has warned against attempts to "hardwire" unnecessary stimulus into a recovering economy by changing the inflation target.
Mark Carney's imminent arrival as Governor has triggered a debate over the Bank's 2 per cent inflation target, but Mr Bean said a move to a growth target could be hampered by data revisions, spiralling inflation expectations and the threat of a new credit boom.
He set a "high hurdle" to changes, and warned: "I believe one should be cautious about committing to monetary policies that remain loose for a very long period after the economy has normalised."
The economy's decline between October and December was left unrevised at 0.3 per cent despite the best quarter for builders since 2011. Investment spending fell and a trade deficit dragged on growth.
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