- We were surprised by the rate of recovery and falling unemployment
- We are in a different place than when forward guidance started
- The biggest event that has not transpired since August is the expected rebound in productivity
- Headwinds still persist for the economy
- Inflation expectations are far more anchored than before
- Thresholds would have been kept in August even if we knew then what we know now, might have set threshold differently though
- Still see growth risks from Europe, exports outlook is challenging
- Strong pound adds to those challenges
- Forward guidance is not time contingent
Charlie Bean
- Would want to start tightening policy before slack is completely taken up
- Waiting until gap is closed is a recipe for leaving things too late
- Tighten too early and you risk productivity gains