The central bank's policies, he said, "had the effect of avoiding the second round effects" of low inflation filtering into wage negotiations and the determination of prices.
Credit Suisse analyst Jonathan Pierce said in a note: "We think A&L should be commended for the liquidity facility implemented but feel the second round effects on earnings continue to be overlooked by the market.
Faced with similar initial increases in the CPI (the "first round" effects), and for given employment, workers in the 1970s asked for and obtained a rise in nominal wages, which then led to higher prices and confronted the central bank with a worse trade-off between activity and inflation.
Mr Osborne explained to committee chairman Andrew Tyrie: "The no detriment principle is around the adjustments to the block grant connected with the loss or additional tax revenues that come from the first round effects and potentially behavioural effects.
The second-round effect on the world economy is likely to be more limited, as the UK economy accounts for a small and shrinking share of global GDP".
But although particular companies may lose out, the first-round effect of this fall should provide good news.
What remains is the second-round effect, whereby local occupation-specific unemployment makes the region less attractive, reducing local occupational labour supply and raising pay.
Increasingly our policy makers need to consider the second-round effects of our own policy changes via the trade channel," he said.
This means that GDP growth might turn positive in the second quarter even if foreign demand remains weak.Unfortunately, the economy is likely to totter again as the second-round effects of tumbling profits and rising unemployment squeeze investment and consumer spending.
In my view, the low level of domestic pressure on inflation now, the absence of second round effects from the depreciation of sterling, and inflation expectations around their historical averages, make it possible to wait before tightening policy until there is clear evidence that pay growth is responding to the level of unemployment in line with our forecast.
It's of significant magnitude, the first name of the commission that proposed it is "bipartisan," it cuts labor costs to employers and boosts paychecks of workers, who will spend the money, generating useful second round effects.
