For a careful discussion of the channels through which a low-for-long scenario could still engender material risks to financial stability, see Committee on the Global Financial System (2018) Financial stability implications of a prolonged period of low interest rates. CGFS Papers No 61.
Conclusion – confidence in words, as well as actions The Bank has a role to play nurturing that process, to the extent possible within the confines of our inflation-targeting framework. There is no conflict between nurturing this and our need to get inflation up to the 2 per cent target. In monetary policy, actions are critically important, but words, too, matter a great deal.