The Bank of England's core priorities have been to stabilise prices and to prevent threats to the financial system.
So they will sell as prices rise to keep their holdings below that limit, which tends to stabilise prices.
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Conditions in the global economy have changed dramatically since then, however, forcing oil producers' group Opec to cut output levels in an effort to stabilise prices.
Mr Bernanke wrote another paper with Mr Gertler arguing that central banks would do better not to try to stabilise asset prices but instead to concentrate on a target for consumer-price inflation.
As the two top producers of the Organisation of Petroleum-Exporting Countries, Saudi Arabia and Iran share a crucial interest in current efforts to stabilise oil prices.
The FHFA numbers also strip out the top end of the market, where there are reasons to think that prices will stabilise more quickly.
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However, they predicted prices would continue to stabilise over the coming three months as confidence gradually returns to the housing market.
"If this trend continues, house prices are likely to stabilise once again or may, indeed, drift modestly upwards, " Mr Charles said.
In particular, hopes that house prices may now stabilise are likely to be dashed.
It was first proposed 87 years ago by Irving Fisher, an American economist who believed that policy makers should try to stabilise a broadly defined price index which included asset prices such as shares, bonds and property as well as the prices of producer and consumer goods and services.
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EU's common agricultural policy was originally devised to secure free trade in farm products within Europe by paying the same guaranteed prices to all, and to use these payments to stabilise farmers' volatile incomes.
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The report forecasts that the consumer prices index will rise to 3% over the summer, but fall back to 2.5% by the autumn, as energy bills and food prices stabilise.
Thus, even if house prices do not plummet and interest rates do not rise, but both merely stabilise, the boost to consumer spending will surely fall away.
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