BoE’s Bailey: Inflation pressure will not last
Bank of England governor Andrew Bailey reckons factors pushing up inflation in the coming months will not persist, but nevertheless the Bank will keep a watchful eye on the situation.
“So the really big question is: ‘Is [higher inflation] going to persist or not?’ Bailey said at an event with members of the public organised by the BoE.
“Our view is that on the basis of what we’re seeing so far, we don’t think it is.”
Inflation – and whether it is about to soar – has been a central theme that has dominated conversations among economists, analysts and bankers over the past few months.
The Bank of England forecast in February that inflation would reach 1.9 per cent by the end of the year, but many economists expect it will exceed its two per cent target before then.
In the medium term, the Bank sees less upward pressure on inflation due to weakness in the job market, which it expects to persist even after the economy returns to pre-pandemic levels.
UK inflation rose 0.7 per cent in March – the latest data available – from 0.4 per cent in February, according to ONS figures.
The United States just saw its biggest inflation gain since September 2008, prompting a selloff on Wall Street.