Posen: 'Not Bank's job to lower inflation'

Central banks' aim is not always to lower inflation, but instead to ensure price stability, Adam Posen, a member of the Bank of England's rate-setting Monetary Policy Committee, said yesterday.

Mr Posen had been speaking about European monetary union at Aston University, and an audience member asked him about the claim that central banks' quantitative easing since the financial crisis had triggered inflation. "Central banks' job is not to lower inflation," he said. "Their goal is price stability, not low inflation per se. They are not the same thing because in practice you need inflation a little above the zero measure to keep there from being a lot of lock-ups in the economy."

Inflation is currently at an eight-year high of 3.7 per cent.