Inflation increases will be transitory – BoE officials
Bank of England (BoE) officials testified on Wednesday to the Treasury Committee saying that they believe that any potential increases in the country’s inflationary levels will be transitory.
BoE Governor Andrew Bailey noted that the central bank doesn’t believe inflation will be permanent, blaming the persistence of the coronavirus pandemic on rising inflationary levels. Meanwhile, the central bank’s Deputy Governor Markets and Banking Dave Ramsden confirmed Bailey’s comments, adding that he is slightly more worried about inflation risks but was comfortable about continuing the quantitative easing (QE) program.
Lastly, BoE’s Monetary Policy Committee External Member Silvana Tenreyro said that responding to higher prices now could lead to future “undesirable volatility” and that it could even be possible to unwind QE earlier. However, BoE’s Deputy Governor for Monetary Policy Ben Broadbent was more cautious saying that labor market pressures on inflation levels could “persist.”
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