Bloomberg reports that Bank of England Governor Andrew Bailey said the central bank will “have to act” to curb inflationary forces and warning higher energy costs mean price pressures will linger.
Bailey said that while central banks don’t have the tools to counter supply disruptions and he still believes the recent acceleration of inflation will be temporary, officials need to seek to prevent higher inflation expectations from becoming entrenched.
Traders are betting that the BOE will start raising rates in the final months of 2021, and will take its benchmark to 1% by the end of 2022 from the current record-low of 0.1%. The MPC will hold two more policy meetings before the end of the year.
Michael Saunders, widely seen as the most hawkish member of the Monetary Policy Committee, this month appeared to reinforce signals of an imminent hike.