BOE's Haldane: There is risk of central bank complacency allowing the inflation cat out of the bag

Author: Justin Low | Category: Central Banks

Comments by BOE chief economist, Andy Haldane

Haldane
  • High degree of two-sided uncertainty on inflation is understandable
  • We might see higher and more sustained rise in UK inflation than expected
  • We may potentially overshoot target for a more sustained period
  • If economies bounce on vaccine, policy could overstimulate the economy
  • In turn, also overstimulate inflation pressures
  • But also reasonable to expect disinflationary trends to persist
  • Costs to the economy and BOE getting these judgments wrong could be significant
Damned if you do, damned if you don't. That's pretty much Haldane's take here. But at least he is opening the door to the possibility of the BOE looking towards a quicker development in the inflation backdrop.Invest in yourself. See our forex education hub.

Then again, that owes much to the fact that the UK is progressing well on the vaccine rollout. So, that needs to be taken into consideration as well.

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