The Bank has made this commitment to prevent the economy from once again falling into a downward spiral in which falling prices and declining economic activity could be negatively reinforcing. This policy framework is expected to more strongly support private-sector activity as the economy recovers.
Explaining this in a little more detail, the policy commitment to continue with the quantitative easing policy ensures that, even during phases of economic recovery, expectations of short-term interest rates remain stable as long as prices themselves are not rising. In terms of the current situation, this has allowed firms to continue to enjoy low funding costs.