MPC’s Sentance warns over inflation concerns

MONETARY Policy Committee member Andrew Sentance yesterday warned strong global growth could push up inflation, via a knock-on effect from oil and commodity prices.

Speaking to the British Chambers of Commerce, Sentance was positive about global recovery, but cautioned that with Asia and other emerging markets continuing to serve as an engine of world economic growth, there was a risk of renewed upward pressure on inflation through higher oil and commodity prices.

“Recent movements of the oil price have been very sensitive to news about the pace of global growth, and commodity prices have picked up more generally as growth has returned to the world economy,” said Sentance. “If the momentum of the global recovery is sustained, there is a risk of further upward price pressure from this direction, with a knock-on impact on broader measures of inflation around the world.”