These actions necessarily affect expectations for similar actions in the future and bring forward political pressures that confirm such expectations for the future. In these circumstances, a central bank must be particularly aware of the difficult trade-offs between its financial stability and price stability mandate, especially where, like the United States, the central bank does not have a formal objective for price stability.
Britain can play an important role in boosting the flexibility of the European labour and product markets. Such a role is needed to stimulate the European economy, and to offer Europe’s 18 million unemployed the prospect of a new job. To quote Helmut Kohl: “To cooperate as closely as possible with Britain ‘in building Europe’, Europe needs the United Kingdom, and vice versa.