Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

BoE's Bailey says inflation above target is concerning -Yorkshire Post

Published 10/08/2021, 07:53 PM
Updated 10/09/2021, 07:20 AM
© Reuters. FILE PHOTO: Bank of England Governor Andrew Bailey poses for a photograph on the first day of his new role at the Central Bank in London, Britain March 16, 2020. Tolga Akmen/Pool via REUTERS/File Photo

(Removes extraneous word, paragraph 1)

(Reuters) -Inflation running above the Bank of England's target of 2.0% is concerning and must be managed to prevent it from becoming permanently embedded, the bank's governor, Andrew Bailey, said in an interview with The Yorkshire Post newspaper.

"We are going to have a very delicate and challenging job on our hands so we have got to in a sense prevent the thing becoming permanently embedded because that would obviously be very damaging," Bailey told the newspaper.

"Unfortunately, if you look at our last forecast, it is going to go higher, I am afraid."

Bailey's comments appeared to favour the more hawkish side of the debate regarding the outlook for interest rates in Britain, despite growing signs of a slowing economy.

Financial markets have already priced in a roughly 90% chance of a rate hike before the end of the year.

The governor told the newspaper that with the pandemic having altered consumer behaviour, the economy had a whole range of challenges that had to be dealt with.

"We have got some very big and unwanted price changes," he said.

Bailey said pricing in the energy market indicated that inflation would prove to be less transient than the BoE originally predicted.

A price cap on consumers' energy tariffs set by the regulator is expected to rise again next year.

"A huge amount can happen between now and then so I am not going to speculate, but at the moment the forward curve would suggest that it would be higher so that would suggest inflation persistence, so transience would be longer," Bailey said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

He also said there were more people on the government's job retention furlough scheme when it ended last month than the bank had expected.

Latest comments

why don't you increase rates then ? what a c l l own
He should raise interest rates to at least 3% if he is concerned in real
"The pandemic having altered consumer behavior" misses the reality that all major world governments (bureaucrats and politicians) altered consumer behavior. Not a virus.
Someone tag this to j powells twitter feed please
perfect
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.