Inflationary tolerance

Here is a rather telling quote from a recent speech from Andrew Sentance of the MPC:

"The experience of the UK economy in the 1970s and early 1980s, and also in the late 1980s and early 1990s, highlights the danger of relaxing monetary policy when it is not consistent with price stability. The length and depth of the early 1980s and early 1990s recessions – and the rises in unemployment which followed as a consequence – were greatly aggravated by a previous surge in inflation which became deeply embedded in wage and price setting processes. So the superficial idea that being more tolerant of inflation will help to sustain economic growth and jobs in the longer term is profoundly wrong."

That is exactly what the MPC just did; they relaxed monetary policy when prices were not stable.