10:48 AM, 17th November 2021, About 2 years ago 1
The Bank of England Governor, Andrew Bailey, was giving evidence to the Commons Treasury select committee and told them: “I’m very uneasy about the inflation situation. I want to be very clear on that. It is not, of course, where we wanted to be, to have inflation above target.”
Although the last MPC meeting voted 7-2 to maintain interest rates at their current level, Bailey said: “On the decision itself, however, it was a very close call in my view,”
The Governor was clear that he was not promising a rate rise in November despite increasing inflationary pressures, but indicated he thought it was critical that the Bank of England “puts its foot down” to get back to the 2% target in the medium term. He also highlighted that “the labour market looks tight, that’s the big issue at the moment” for wage-led inflation.
Bailey reiterated that developments in the labour market would be the most important factor in his vote. “ he said.
Catherine Mann of the MPC was more Dove like, commenting on the fragility of the economy and a “softness in the potential pricing power of firms.” She believes that current inflation pressures are short term and will fall away more quickly. Despite this, however, she still thinks interest rates will probably need to rise if current Bank of England forecasts prove to be accurate.
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