Following are highlights of Bank of England policymakers' remarks at a news conference to present the central bank's quarterly inflation report.
Quotes are Governor Mervyn King's unless otherwise stated.
ON SQUEEZE ON TAKE HOME PAY
The consequence of that is - unless there are any further adverse movements in world oil, energy and commodity prices, then we would expect that next year real take home pay would start to recover slowly. The extraordinary squeeze on real take home pay that we have seen in the last three years should now begin to come to an end.
It is actually rather important that we see whether inflation does come down.
What's important is not to see this in any context of fine-tuning, we cannot possibly do that.
The big picture is that we think inflation will come down sharply, that it will, towards the end of the forecast horizon, perhaps be somewhat more likely than not to be below target.
ON SHORT PERIOD OF WEAKNESS
We think we are in for, we hope, what will be a relatively short period of some weakness, in large part because of developments in the euro area and the rest of the world.
ON EURO CRISIS AND BANKS
If there were to be a sharp downturn in the euro area, then our banks would be affected by it.
The uncertainty that has been created in the European and world economy by recent events must have, or is likely to have, some potential impact on the pace at which businesses will make investment projects, will they postpone projects, and on the pace of household spending. That is almost impossible to forecast, but it is something that we shall watch very carefully.
ON EURO ZONE IMBALANCES
Everyone understands that these imbalances are serious because the private sector...has since the summer been very clearly unwilling to finance those current account deficits. Someone has to finance them. And this isn't a liquidity problem, this is a problem about reducing the underlying macroeconomic imbalances.
We have no idea how this will be resolved. In the long-run, it is inevitable that a means will be found to reduce the imbalance in competitiveness and trade deficits that have built up. But whether that happens quickly or whether it takes a longer period is almost impossible for us to judge.
ON EURO ZONE ADJUSTMENT AND GROWTH
We have seen slow but positive growth over the past year. We think that once the adjustment in the euro area gets through these difficulties, growth will pick up again.
ON TRADE DEFICIT
We must look at the big picture and take the long view. The long view is that we have to put our trade deficit right, we have had a depreciation of our currency and that has meant in part a squeeze on real incomes.
If we stick to the big picture, with inflation falling back to the target, with a slow, gradual pick-up in real, take-home pay, which should impact on consumer spending towards the end of next year or into 2013, gradually we are in a position where we can put things right.
DEPUTY GOVERNOR CHARLES BEAN ON DELEVERAGING
Having the economy deleveraging sharply at the current juncture is not what we want in the context of a depressed global picture. By encouraging a bit more demand now, you smooth out the adjustment.
KING ON UK BANKS' HEALTH
The most important thing for financial markets to realise is that our banks are in a healthier position than those on the continent.
ON SPECIAL LIQUIDITY REPAYMENTS
As far as the special liquidity scheme is concerned ... virtually all of that has been repaid.
(Being a lender of last resort) is a million miles away from the ECB buying sovereign debt of national countries, which is used and seen as a mechanism for financing the current account deficits of those countries, which inevitably, if things go wrong, will create liabilities for the surplus countries.
In other words, it will be a mechanism of transfers from the surplus to the deficit countries. And that's why the European Central Bank feels, I think, and with total justification, that it's not the job of a central bank to do something which a government could perfectly well do itself.
PAUL FISHER ON MEDIUM-TERM FUNDING
The problem for UK banks and actually banks more generally is not so much short-term liquidity pressures as medium-term funding where the markets are as you know very patchy at least.
SPENCER DALE ON WEAK RECOVERY
The pace of this recovery we have seen over these two years is far weaker than we have seen in the past. That is due very largely to consumption. (That) is what helps to drive recoveries -- we haven't seen that.
DALE ON UK CONSUMPTION
If we get consumption starting to look anything like normal, that will have a very material impact on the pace of our recovery.
KING ON INFLATION AND MONETARY POLICY STANCE
I don't think we're planning deliberately to hold inflation below target in some sense to make up for what happened.
I think what we are pointing out today is that, I mean, we are at 5 (percent), that's way above target, we're not relaxed about that. We want to bring it back to target.
The big challenge for us is to get inflation back to the target - that's the big picture, that's what we are focussing on.
We believe that under current policy settings that ... the balance of risks is in our favour in our direction. But we will have to see, there is a long way to go to bring inflation back to the target.
Our central view is that will happen and we'll see a big improvement in the first few months of next year. But we haven't seen that yet, we've got to wait for that to happen and I don't want to count too many chickens.
ON RESOLVING EURO ZONE CRISIS
Ultimately it is a question of real resources. Central banks don't have real resources; they create money.
To the extent that governments feel that they have to take the burden of transferring real resources from one country to another in order to sustain a current account deficit for a period, that is a decision that can be taken only by governments.
BEAN ON QE EFFECTS
It is obviously early days and it takes time for the effect of the purchases to work through.
So far we haven't seen anything to suggest that this round of purchases is operating in any way differently from the way they did the first time round.
KING ON UNCONVENTIONAL POLICY EASING
If we extend our asset purchases, we will do it through buying gilts.
ON LIQUIDITY PROVISIONS AND FUNDING FOR BANKS
Let me not speculate on what we would do in the future. We have, obviously, a very different framework for providing liquidity now than we did in 2007.
We have a discount window facility and we have our auctions and those auctions can be expanded if we think it's appropriate. But let's not get too depressed about this. Remember, banks always have major funding challenges over the next two years.
Since they borrow short to lend long, banks are always facing very large amounts of refinancing over a two year period.
ON UK CONTINGENCY PLANS
We have plans for a variety of contingencies, but I am not going to speculate now on that. But I do think that in due course our banks will be able to obtain funding again, and it's up to them to ensure that they've got adequate capital positions in order to persuade prospective funders that it's safe to lend to those banks.
ON IMPACT OF EURO CRISIS ON UK GDP FORECASTS
The big picture, I think, from the report is looking back, if you look back, then the biggest impact on growth in the past year and a half has been the squeeze on real take home pay and consumption.
Looking ahead, why have we revised down our projection this time? That's largely news from the euro area.