The Bank of England’s Deputy Raises Concerns Over Inflation

The Bank of England’s soon-to-be deputy governor, Sarah Breeden, cautioned that controlling inflation might be more challenging, suggesting a potential need for prolonged elevated interest rates.

She indicated that the Bank’s recent inflation projections lean more towards an increase and emphasized the tangible threat of secondary impacts of inflation becoming a fixed feature in the UK’s economic landscape. This could result from employees seeking heftier wages due to higher living costs and companies upping their prices to compensate for their escalating expenses, leading to an inflationary cycle.

Recent data from the Office for National Statistics revealed a notable surge in wages over the last quarter ending in July.

While addressing the Treasury’s panel of MPs, Ms. Breeden commented, “Currently, the trend shows that wages are not only high but also climbing, and the knock-on effects may solidify this inflationary trend. We aren’t predicting a downturn, nor do we wish to induce one. The Monetary Policy Committee (MPC) will exercise caution in its decisions.”

Furthermore, she highlighted that, in comparison to pre-pandemic figures, the UK’s GDP has barely advanced, even considering the recent official statistics adjustments.

Market experts estimate a 78% likelihood of the Bank of England hiking interest rates from 5.25% to 5.5% in the upcoming week, with a 22% possibility of them remaining unchanged.

Linking Shareholders and Executives :Share Talk

If anyone reads this article found it useful, helpful? Then please subscribe or follow SHARE TALK on our Twitter page for future updates. Terms of Website Use All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned

Weekly Newsletter

Sign up to receive exclusive stock market content in your inbox, once a week.

We don’t spam! Read our privacy policy for more info.