Comments from BOE officials at a Treasury Committee

BOE Governor Bailey


  • Persistent of covid means there has not been the expected rebalancing of demand between goods and services, pushing inflation higher than expected
  • We do not think inflation will be persistent
  • We think it is unlikely that commodity prices will continue to rise
  • We expect supply chain bottlenecks to sort themselves out
  • Market curves point to some increase in interest rates
  • MPC members were split in August 4-4 on whether the minimum conditions were met to raise interest rates
  • When BOE stops reinvesting in gilts, we would want it to have little or no impact on yields


  • Central view in BOE forecasts is that inflation will be transitory
  • Coming increase in inflation is likely to be transitory
  • I put more weight on inflationary than deflationary scenario
  • I voted with the majority but I will be monitoring the data
  • Says he's slightly more worried about inflation risks but comfortable continuing with current QE program


  • I agree with the central view on inflation
  • As long as there are no broader second-round effects, responding to higher prices now would cause undesirable volatility
  • It should be possible to begin unwinding QE earlier


  • Labour market pressure on inflation could persist

In these comments and others from central bankers there's a growing sense of worry about bottlenecks and the slow pace that they're resolving.