The inflation-targeting framework from an historical perspective
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چکیده
On 8 October 1992, three weeks after sterling’s departure from the Exchange Rate Mechanism of the European Monetary System, Norman Lamont, then Chancellor of the Exchequer, established a new framework for monetary policy based on a range of 1%–4% for annual RPIX inflation.(1) In 1997 this framework was further developed with the Bank of England being given operational independence and a symmetrical target of 2.5% for annual RPIX inflation, subsequently changed to 2% for CPI inflation. Throughout the inflation-targeting period, UK macroeconomic performance has been characterised by low and stable inflation, historically low nominal interest rates, and, as of 2005 Q1, 51 quarters of uninterrupted output growth.
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