Bank of England Andy Hulldan expresses 4% inflation concerns

Andy Haldan

Andy Haldan

The Bank of England’s Chief Economist withdrawal warns that the risk of high inflation is “rapidly rising” and could reach close to 4% this year.

Andy Haldane said less than a week after the World Bank’s Monetary Policy Committee (MPC) rejected rising inflation as “temporary.”

The blow of consumer price inflation Highest 2.1% in 2 years In the year to May, it exceeded the World Bank’s 2% target.

MPC said it expects inflation to exceed 3% “temporarily”.

Considered by many observers as an outlier in inflation, Mr. Halden is often a minority on the Commission.

In a speech to the Institute for Government, Halden, who will leave the World Bank 32 years later, said “everyone will lose” from greater inflation.

“Overall, inflation expectations and monetary policy credibility feel weaker than they are today since the introduction of the inflation target in 1992,” he added.

“By the end of this year, we expect inflation in the UK to be close to 4% rather than 3%.”

Mr Halden said the Bank, if he was right, might need to respond to higher interest rate hikes than currently expected.

He added: “Even if this scenario is a risk rather than a central view, it is a rapidly rising risk and it is best to manage it in advance rather than a follow-up response.

“If this risk is realized, everyone will lose. Central banks need to carry out economical handbrake turns, businesses and households face higher borrowing and living costs, and the government pays off debt. Faced with rising costs. “

Last week, the MPC voted 9-0 to stabilize interest rates at a record low of 0.1%.

Prices haven’t changed since the price was cut last March to curb the financial shock of Covid-19.

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