As an interim measure, I will shortly be seeking from my Board a specific delegation of authority enabling the MPC both to formulate and implement its monetary policy decision. In this way, the MPC which we are launching this morning, before this august assembly of dignitaries, will operate in line with international best practice.
For instance, the downward pressure that APP exerts on term premia is strengthened by the negative interest rate policy and the rate forward guidance that offers an expected horizon for continuing that policy in the near term. Negative remuneration on banks’ excess reserves induces lenders and other investors holding cash reserves to diversify away from liquidity into longer-dated assets.