There is undoubtedly less scope for policy easing than there was a few years ago, but the charge that central banks are now powerless is, in our view, exaggerated. For a start, policymakers still have room to cut deposit rates further and expand their QE programmes, which should help to support activity and lift inflation. And if growth and inflation fall further, we suspect that governments and central banks would, eventually, adopt more radical policies to revive their economies.
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