The Bank of England's chief has said it cannot be expected to fine-tune the British economy.
In testimony to a House of Lords committee, Governor Mervyn King said the British economy was on course for a bumpier ride over the next few years after the remarkable stability of the last few.
'The idea that the Monetary Policy Committee can fine-tune the economy and can in fact ensure that the economy always seems to grow at some fixed rate every quarter is absolutely imaginary,' he said.
King's comments are likely to boost expectations that the central bank is not poised to cut interest rates again as many analysts had predicted it would in response to slowing growth. He added that the bank was targetting inflation, not retail sales and consumer spending.
British inflation has recently jumped above its 2% target partly because of rising energy costs.
