Bailey rejects BoE blame for Covid inflation

Bank of England governor Andrew Bailey has said that he rejects criticism that the BoE is responsible for rising inflation because of Covid.

Speaking at the Oesterreichische Nationalbank, Annual Economic Conference in Vienna, Bailey said that rapidly rising energy, goods and some food prices are the main cause of high inflation.

He said he rejects the argument that the response of the Bank’s Monetary Policy Committee to Covid let demand get out of hand and stoked inflation. “The facts simply do not support this”, he said, “On the latest number, UK GDP in March was only 0.6% above its pre-Covid level, and it is substantially below the path it was expected to follow pre-Covid”.

He went on to say, “The Bank of England will, as always, take monetary policy decisions to ensure that the inflation target is met over the medium term. We have raised the official rate four times so far and have made clear that in order to bring inflation down to target we are prepared to do so again based on the assessment at each of our meetings”.