The official of Bank of England (BoE), catherine mannsaid on Friday that there is very little in the data showing a reduction in inflation expectations, except in the government bond market, as reported by Reuters.
Mann explained that there were differences in the Monetary Policy Committee on how to assess whether the economy had recovered from COVID. There were also differences on where to put the weight, whether in the level of employment or in the rate of labor participation. Even the differences were about how to assess inflation expectations.
“The rise in energy prices has come as a surprise to central banks, there are geopolitical issues at play,” Mann said. He explained that much of the UK’s goods price inflation has come from abroad, not from something the BoE could have foreseen.
About purchasing programs (Q.E.) Mann said that it has created a lot of liquidity, but that it has not had a great impact on the real economy, as it is increasingly absorbed by the financial sector and not transmitted to the real economy.
Regarding inflation, the official said that “if the inflation dynamics of 2021 are repeated in 2022, inflation will exceed BoE forecasts“. He emphasized that his attention is on inflation expectations.
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
