Just a few weeks ago we were facing recession according to official forecasts if we voted Leave. Now we are told there will be little or no growth instead. These forecasts are very flexible, and doubtless wrong.
The Bank should have waited to see proper data for output and activity for the first quarter or so after the vote before rushing in. It seems as if they are desperate to get the pound down, as the one and only thing that has been performing as they forecast pre the vote.
There is no need to fear, as some now do, that the Bank is running out of options to stimulate. As the Bank itself makes clear, it could have a bigger QE programme, it could widen the range of assets it buys in with created money, and it could expend the bank lending facility. It could also cut interest rates again.
I hope it does none of these things. I do not think they are needed. Triggering more asset inflation is not a good idea, at a time when we would like more UK citizens to be able to afford a home of their own. There is as yet no evidence of a collapse in demand or a serious likelihood of a Brexit induced recession. Real wages are rising strongly. We do not need the Bank to erode them too much by sparking a weak sterling leading to a higher rate of inflation.
The Bank admits it has to control inflation as well as avoid recession. Its latest actions do not seem to take its inflation duty seriously enough.