Bailey (BoE): There is a risk that inflation will remain high for longer

The Bank of England Governor Andrew Bailey expressed concern about the risk of inflation rising “for a longer period of time”, but said there was a possibility that inflation could be less persistent.

The Bank of England (BoE) latest forecast puts inflation at 5% in the second quarter of next year, more than double the bank’s official target, due to the huge rise in energy prices and supply chain problems as the is coming out of the COVID-19 pandemic.

“We are in a feverish situation… [η εικόνα για τον πληθωρισμό] “It has two sides,” Bailey told the Sunday Times, according to Reuters.

“There are risks on both sides. Of course, our concern is that if it goes into side effects, it could [ο πληθωρισμός] to remain at increased levels for longer “.

“If the economy goes as our forecasts and reports show, we will have to raise interest rates. This is fully consistent with my statements from last October,” he added.

The BoE governor also noted that his decision to vote to keep interest rates unchanged at the last monetary policy meeting on November 4 was very difficult. The BoE surprised many investors when it did not raise interest rates from a record low of 0.1%, following Bailey’s statements in late October about the inflation rally that were interpreted as a clear sign that the bank was approaching a tightening. its policy.

Inflation in Britain has already climbed to a 10-year high of 4.2%.