BoE Governor Andrew Bailey said in a Treasury Committee hearing, “we are concerned about persistence (of inflation) and that’s why, frankly, we raised interest rates this time.”
“I am very uncertain particularly about price-setting and wage-setting in this country. We have got the largest upside skew in our forecasts that we have ever had on inflation,” Bailey added.
Nevertheless, “what I would urge is that – particularly going forwards because we think inflation is going to fall very rapidly – that is taken into account,” Bailey added.
Chief Economist Huw Pill said, “There is no room for complacency. Inflation remains unacceptably high… Returning inflation to target in a sustainable manner requires that the MPC continues to be watchful for signs of greater persistence in inflationary pressures than is embodied in our baseline forecast.”
MPC member Jonathan Haskel warned, “Economic theory suggests that uncertainty around the persistence of inflation should be met with more forceful action… I shall remain alert to indications that inflation is more persistent than we expected, and act forcefully if necessary.”
On the other hand, Silvana Tenreyro said, “Unless there is another big development that we don’t know about – and we have a massive energy shock or something that is not on the cards – then I think they fall in inflation is pretty much guaranteed.”
“Where things stand right now, I would see myself considering a cut. I don’t want to talk about the particular meeting,: Tenreyo added.
