The overriding goal was to support the economy through this economic contraction and bring inflation back to the Bank’s 2% target. That’s because, if left unchecked, the pandemic forces at work on the economy in those early days could drive inflation persistently below zero, starting a deflationary spiral. These policies combined a bold response with a clear exit strategy.
Given the heightened uncertainty, our exit from emergency measures had to be based on outcomes, not on a fixed calendar.