In addition, though, an overhang of debt in a household can have the effect of chilling all initiative and discouraging enterprise, and in other ways impeding the economic recovery. Finding – or better implementing – workable ways of addressing this unprecedented problem will continue to challenge the institutions of state in all sorts of ways.
To maintain the symmetry of its inflation target, the Governing Council recognises the importance of taking into account the implications of the effective lower bound on nominal interest rates. In particular, when nominal interest rates tend to be low throughout the business cycle, like at present, the economy operates not too far from the lower bound.