BoE Governor Andrew Bailey admitted in an interview that yesterday’s inflation numbers were “higher than we thought it would be”. But the central bank won’t be rushed in to raising interest rates.
“What we will have to do, again, is go through all the evidence and assess to what extent we think the sorts of things that underlie that are likely to be transitory,” he added. “And to what extent is it going to cause second round effects – so it starts to get embedded in expectations and it gets into wage negotiations and it’s difficult to get out (of an inflationary cycle).”
In reaction to people who said that BoE is being “casual” about the surge in inflation, he emphasized, “we’re not at all actually.” “The committee has been very clear – if we think the case is made, then of course, we will respond and use the policy tools. We must do that.”
