The Bank of England needs attention to reducing inflation without hitting jobs, warning against rates

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The interest rates said that inflation in the UK is very high and the Bank of England will need to direct a difficult path to topple it without leading to a painful shrinkage that strikes jobs.

Sarah Braidin, the Deputy Governor of the Bank of England, told Cardiff on Tuesday that inflation had reached 4 percent in September due to the high prices of food and energy, as well as increases in salary and prices that are managed. She said, “It is very high.”

Meanwhile, Catherine Man, an external member of the Bank of England Monetary Policy CommitteeThe Phennasial Times event in London was told that families’ expectations for enlargement in the future were clearly drifting for the official goal of 2 percent. She added that policy makers “must do a lot of work” to restore prices and rebuild credibility.

Their comments reflected the MPC that the United Kingdom To become strange between the advanced The economies of the stubborn continuation of high inflation, partly due to the effects of government policy, but it is also likely to be the result of permanent changes in captivity and companies.

MPC was deeply divided when interest rates were reduced in August, with two rounds of voting before reaching a decision. But in September, she voted with a 7-2 majority to keep borrowing costs by 4 percent, and market participants do not expect any additional change before the end of the year.

PREDEREN said it still expects the hump in the short term to be worse than “a stumbling block”, as inflation is scheduled to return to Bank N 2 percent with weakening the job market and reduce wage pressure. The inflation stood in 3.8 per cent in AugustAccording to official numbers.

But she referred to the risks on both sides. On the one hand, inflation can be proven “sticky, not rugged” if companies become more willing to pay through price changes, or if political makers have an exaggeration in estimating the amount of stagnation in the labor market, two rids said.

On the other hand, if the Bank of England waits for a very long time to reduce prices again, then there will be “costs for production and employment” that may pull inflation without the target.

Man said that there are now clear risks that a long period of inflation above led to a shift in consumer behavior.

In the UK, when inflation increased from 3 percent, “consumers begin to pay a lot of attention to all the prices they see,” she said. “We were above that threshold for some time.”

But Man added that this does not mean that she was excluding more cuts in interest rates.

“Consumers are concerned about inflation. They are increasingly concerned about the prospects for activity – in other words, employment prospects,” she said, noting the great uncertainty about the expectations of GDP growth.

She said: “If the economic climate proves that it is more prosperous,” consumers will open their jeep book at least a little and go out and buy things. “

However, if the economy is flat, they will “maintain the closing of the pocket book” and companies will be unable to raise prices strongly, because “consumers cannot or do not buy your belongings.”