Bank of England Governor: Risk of Persistent Inflation in the UK is Receding
In a recent statement, Bank of England Governor Andrew Bailey announced that the threat of rising persistent inflation in the UK is gradually diminishing. Bailey expressed optimism that inflation could return to target levels despite the ongoing challenges in the country's economy.
Bailey noted that the current economic dynamics, along with the central bank's efforts to curb inflationary pressures, provide a foundation for confidence. However, the governor emphasized the need for continuous vigilance, as shifts in the economic landscape may present new challenges.
The Bank of England head also addressed the situation with energy prices and their impact on the overall price level in the country. The main risk, he mentioned, is that consumers may begin to demand higher wages if they continue to feel the pressure from rising costs. This, in turn, could create a vicious cycle contributing to further inflation.
Nonetheless, Bailey stated that current forecasts suggest that inflation in the UK may start to decline. He urged caution, adding that the Bank of England's future actions will depend on the changing economic conditions.
In conclusion, he reminded that the central bank is prepared to take necessary measures to manage inflation if needed. Bailey also urged the business community and consumers to remain patient, as time is required for the full recovery of the economy following periods of instability.
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