BoE’s Bailey says he is ‘very uneasy’ about inflation

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FILE PHOTO: A man walks past the Bank of England in London, Britain October 31, 2021. Businesshala/Tom Nicholson
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LONDON (Businesshala) – Bank of England Governor Andrew Bailey said he was very uneasy about the inflation outlook and his decision earlier this month to keep interest rates on hold, which rattled financial markets, was too close. There was a call.

“I am very uncomfortable about the state of inflation,” Bailey told the House of Commons Treasury Committee on Monday. “I want to be very clear on that. It’s certainly not where we want to be for inflation above target.”

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“On judging, though, it was a very close call in my opinion,” Bailey said.

He said that due to the lack of official data on what happened to around 10 lakh employees, who were on leave even after the government jobs protection program ended on September 30, they should wait instead of raising rates this month. fell.

The BoE said on 4 November that most of the nine members of the monetary policy committee wanted to wait for more data on the job market, including data on Tuesday, to be sure raising rates was the right move.

That decision misled many investors, who thought that previous comments by Bailey meant a rate hike was to be announced by the BoE this month.

Bailey told lawmakers on Monday that he thought the labor market was looking “quite tight” and anecdotal evidence shows unemployment has not increased since the end of the furlough scheme.

Michael Saunders, one of two MPC members who voted to raise rates earlier this month, said he sees no risk of a wage-price spiral, but the prospect of a general pick-up in inflation justifies higher borrowing costs. was strong enough to hold.

Reporting by Andy Bruce, Writing by David Milliken, Editing by William Schomberg

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