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Monetary Policy Committee — Question

Part of the debate – in the House of Lords at 3:22 pm on 6th July 2011.

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Photo of Lord Sassoon Lord Sassoon The Commercial Secretary to the Treasury 3:22 pm, 6th July 2011

My Lords, the really important thing here is that the inflation expectations remain very low. All the range of forecasters is predicting that inflation will come down to the range of 2 per cent to 2.1 per cent in 2012 and beyond. That is the critical challenge for the MPC, in which it has the market's confidence, and that is what underpins the very low interest rates that we continue to enjoy. We suffer, inherited from the last Government, a deficit the size of Portugal's, but we have interest rates at the level of Germany's.