Monetary Policy. An exact science?

Further to Mashiat’s post about the MPC setting interest rates.  Mark Carney yesterday commented on how increased pressure in the housing market and falling unemployment wouldn’t necessarily cause interest rates to rise.  We know that managing the macro economy is akin to driving down the 30 in reverse, with all the windows blacked out, and a 20 second delayed reaction to braking and accelerating.   So what is the criteria the MPC consider before changing interest rates?

bank of england interest rate changes                               the governor

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