MNI BRIEF:  BOE Broadbent: Ukraine War Sharpens Policy Dilemma

If financial market participants become too reliant on central bank policy steers asset prices can move too slowly in response to news, Bank of England Deputy Governor Ben Broadbent warned in a speech Wednesday on the challenges of forward guidance.

"If people come to rely too much on explicit steers from the central bank, forward interest rates and other asset prices may become insufficiently sensitive to economic events," he said.

He only touched briefly on current policy, noting of the war in Ukraine that "from the narrow perspective of monetary policy it will result in the near term in the difficult combination of even higher inflation but weaker domestic demand and output growth."