The Bank has described the exchange rate as “uncomfortably high”, and suggested that balanced growth in the economy would probably require a lower exchange rate. The Board has maintained an open mind about whether we may need to lower interest rates further. At this point, however, there are few serious claims that the cost of borrowing per se is holding back growth.
On the contrary, monetary policy is supporting higher spending by altering incentives as between spending and saving, and working to create an environment in asset and credit markets that eases the restraints on some sorts of activity. 2  BIS central bankers’ speeches  In the end, though, firms and individuals have to have the confidence to take advantage of that situation.