The report said: "In the event of protracted demand weakness and inflation undershooting, monetary and fiscal policies should be eased, taking into account the benefits and potential costs of such a move.
"We won't experience all the fears of the 20th century like war, dangerous inflation or protracted down cycles.
"It agreed that, as long as domestic cost and price pressures remained consistent with inflation returning to the target in the medium term, it was appropriate to look through the temporary, albeit protracted, period of above-target inflation".
The royal cronies became fabulously wealthy while the plight of the average Iranian worsened because of protracted unemployment coupled with soaring inflation.
"A comprehensive package consisting of a more growth-friendly composition of fiscal policy, an expansionary fiscal stance where fiscal space is available, demand-supportive structural reforms and measures aimed at addressing weaknesses in bank and corporate balance sheets should play a complementary role in mitigating the risk of protracted weak demand and low inflation".
Ordinarily, this would be viewed as hawkish signal, but given the BoE only stated last week (and King repeated in today's press conference) that it "was appropriate to look through the temporary, albeit protracted, period of above-target inflation" there is little prospect of them doing anything about it.
Inflation remains above the MPC's target of 2%, and is expected to rise further this year, but those supporting an expansion to QE said the committee should look beyond "temporary, even if protracted, periods of above-target inflation".
He said this was largely down to a "deep and protracted squeeze" on many people's real incomes, as inflation outstrips pay rises and energy and food prices increase.
While we expect that the situation will develop relatively smoothly, the committee believes that, given the current tightness in labor markets, the potential for accelerating inflation is probably greater than the risk of protracted, excessive weakness in the economy.
Investment-led recessions, which were common before the second world war, tend to be deeper and to last longer because it takes longer to purge financial excesses and over-capacity than it does to tame inflation.Worries that America's downturn may be more protracted than originally expected are largely to blame for the recent slide in the dollar.
