BoE’s Bailey Expects Limited Impact from Rising Inflation

The Bank of England (BoE) Governor Andrew Bailey is not expecting long-term impacts from thw recent surge in consumer prices.

The inflation rate in the United Kingdom (UK) rose last month to 1.5%, compared with 0.7% in March, as the economy recovers from the coronavirus pandemic, and amid rising energy prices.

“The Monetary Policy Committee judges that these transitory developments should have few direct implications for inflation over the medium term,” Bailey told the British Parliament’s Treasury Committee.

“I would also want to see how pay and other price pressures, which have risen recently, but are difficult to interpret owing to distortions from the furlough scheme and compositional effects, respond to normalization of economic activity,” said BoE Deputy Governor Jon Cunliffe.