BoE Deputy Governor Ben Broadbent said in a speech, “most of the overshoot relative to target in the latest CPI numbers… reflects unusually strong inflation in goods prices”. That would also be true of the “larger overshoot we’re going to see towards the end of this year”. “If this was only a story about global goods prices,” he added, then the appropriate policy response to the current inflation would be “nothing”.
Also, “while we know it’s going to go further over the next few months, I’m not convinced that the current inflation in retail goods prices should in and of itself mean higher inflation 18-24 months ahead, the horizon more relevant for monetary policy,” he added.
