But in exchange for this flexibility in our instruments, we must keep fixed on three commitments. The first is our monetary policy objective: we must try and keep inflation close to its target path without letting the output gap fluctuate excessively. The second is to explain our actions, so the private sector can plan accordingly.
As I hope that I have made clear, the interaction of market signals and policy is neither simple nor straightforward. You watch us and react to our actions, while simultaneously we monitor you and respond as best we can to the signals you provide about evolving economic and financial conditions.