Listening to Mark Carney last week, you could be forgiven for thinking that the UK economy is in danger. In reality, we know remarkably little about what is now happening.

The GDP data for the second quarter, when businesses and consumers should have been suffering from the greatest Brexit uncertainty, turned out to be surprisingly strong.

Surveys have recently suggested marked weakness, but since these were conducted post-referendum, they may well be picking up a knee-jerk effect, as well as a reaction to the apparent paralysis of government, which has since been swiftly ended by Mrs May’s coronation. Admittedly, it is also possible that the economy is weakening. We simply don’t know.

Bear in mind, though, that after the pound’s ejection from the ERM in 1992, it was some time before Black Wednesday became referred to as Golden Wednesday. Although today’s circumstances are different, I think there is a pretty good chance that something similar will happen. This is not to say that last week’s package of measures from the Bank of England was wrong. On balance, I support it. But when it comes to the future, it is not clear that there should be more of the same.

First, the Bank should wait for information about the state of the economy. Thereafter, although it might make sense, in due course, to extend quantitative easing, the same does not necessarily apply to reductions in interest rates.

David Fuller's view

Here is a PDF of Roger Bootle’s column.

I assume Mark Carney felt it was more important to err on the side of support for the UK economy in the face of Brexit uncertainty.  Additionally, the challenge of dealing with a deflationary Japanese-style slump - probably not more than a 20% risk - would be more difficult once it occurred than slowing inflation at a later date.