Bank of England Governor Mark Carney made the following comments at an event in Edinburgh in response to a question from Chief Investment Officer, Haig Bathgate, on the value of sterling and UK interest rate policy:

"The behaviour of the currency has had important influences on inflation. Over the course of the last five years the depreciation flowed through relatively quickly to prices. It was one of the reasons why inflation was above target for several years. We would expect some pass through from sterling's strength to help reinforce other forces that are helping to create a more benign inflation environment, and they include global disinflationary pressures.

"It's within a context of providing some dampening to the inflation outlook, which obviously is one input into the stance of monetary policy.

"For the first phase of forward guidance we used the 7% unemployment threshold to give businesses in Scotland and across the UK a confidence that we weren't going to prematurely withdraw monetary stimulus.

"The MPC signalled that we don't see any need for an immediate adjustment to that policy, and we will provide further thinking and guidance in the coming weeks."

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