Daily Management Review

Haldane Worries On The Impact Of Inflation On The Poor, While Urging BoE To Take ‘Serious Look’ Into The Matter


06/30/2017


Inflation check comes from a careful consideration of interest rate hike.



The chief economist at BoE, Andy Haldane, stated that the central bank needs to consider the issue of interest rate hike to keep a check on “inflation”. However, he seemed happy with “current level” of interest rates.
 
It came to the surprise of the “financial markets” that Haldane wants to vote in favour of “an interest rate hike” for this year. In his words:
“We need to look seriously at the possibility of raising interest rates to keep the lid on those cost of living increases”.
“For now we are happy with where the rates are, we need to be vigilant for what happens next.”
 
The inflation in Britain is sitting at the “highest” within last four years’ span, as it tightens the grip on consumers while the uncertain political scenario adds to the worry, given the “inconclusive election” of this month.
 
According to the Haldane setting the interest rates needs to be done in a manner so as to minimize the persistent risk of “high inflation”. In Haldane’s statement to the Guardian:
“First and foremost, we need to set our interest rate policy to prevent those higher inflation rates becoming entrenched”.
 
Haldane finds that along with the breach in the “bank's inflation target of 2 percent”, its “impact” on the poor people causing concerns, for him, it “is having big and serious consequences for those on the lowest incomes in society and that came across loud and clear today”.
 
 
References:
www.reuters.com







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