Bank of England's (BoE) Deputy Governor Ben Broadbent suggested on Monday that the aggregate rate of inflation is likely to increase further in the next few months, with the chances being that it will comfortably exceed 5% in April as the tightening of the labour market is likely to be a more persistent source of price pressure. "Transitory" should be understood as referring to the next 18-24 months, he added.
The BoE's official also noted that good reasons to think that this rapid inflation will likely fade, reversing before a policy decision is taken now could do much.
In Broadbent's opinion, the best possible approach is to think at every meeting about the level of interest rates, as this will maximize the chances of hitting the inflation target a couple of years from now.