Daily Management Review

Andy Haldane: Bank of England will raise the rates carefully


02/12/2018


The Bank of England will have to raise interest rates again to fight inflation. However, the regulator is not going to act aggressively, the chief economist of the central bank said.



Diliff
Diliff
Andy Haldane referred to the statement of the Bank of England after the policy meeting, according to which interest rates are likely to grow somewhat faster and to a slightly greater extent than previously thought.

According to Haldane, the regulator closely follows inflation, which is currently ahead of the target level of the central bank. That is why the regulator has already raised the rate, so in the future it may be necessary to do it once again.

The central bank raised interest rates for the first time in more than a decade in November, and financial markets now see an approximately 70 percent probability of an interest rate increase of 25 basis points in May. Thus, the Bank of England’s interest rate may amount to 0.75 percent.

Haldane noted that any increase in the interest rate during the next year will be insignificant.

"We are not in a hurry, the rates will not return to the levels we saw in the past, but maintaining the subsistence level is under control - this, in our opinion, is the only best and most important thing that we can do to help the economy," the Bank of England’s representative said..

Inflation in consumer prices in Britain reached its highest level in the last five years and amounted to 3.1% in November.The central bank predicts that it will take more than three years to return to the 2% target if rates are not raised.

source: reuters.com






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