Message of determination to reduce inflation from the BoE

Bank of England (BoE) Governor Andrew Bailey said the bank is determined to reduce inflation to the 2 percent target over the medium term.

Speaking at the British Chamber of Commerce (BCC) Annual Conference, Bailey defended rate hike decisions taken to bring inflation down to the target level of 2 percent in the country.

“We know that high interest rates make things difficult for a lot of people,” Bailey said. But we are also aware that high inflation always hits the less wealthy the hardest.” saying.

“Our job is to make sure that inflation is low (level) and stable. So we had to raise interest rates to keep inflation down.” Bailey said: “Unfortunately, monetary policy cannot remove the effect on real income. “What we need to do is take measures to ensure that inflation falls as external shocks subside,” he said.

EXPLANATION OF INFLATION AND INTEREST

Stating that he is aware of the consequences of high inflation, Bailey said: “If we didn’t control inflation, it would have created a worse outcome.”

Responding to the question about how long high inflation will continue, Bailey said: “I’m afraid we don’t have any means of removing the initial shocks.”

Emphasizing that the bank is fully determined to bring inflation down to the target level, Bailey warned that the tight job market and rising food prices may keep the cost of living going.

“I can assure you that the Monetary Policy Committee will adjust the bank’s interest rate as necessary to sustainably return inflation to target over the medium term,” Bailey said in his speech.

Reiterating that the bank is “unhesitating” in its commitment to the 2 percent inflation target, Bank of England Governor Bailey also stated that he visited a food bank in the city of Exeter yesterday and said: “It is It is clear that many people are faced with difficult decisions and have to cut back on their essential needs.” .

“YOU CAN TRUST THE BANKS”

Bailey, who also assessed the possible effects of US bank failures on the UK financial market, said the public can trust UK banks.

“The UK banking sector remains resilient with ample capital and strong liquidity positions. The banking sector continues to have the capacity to support the economy.” made his assessment.

Referring to the outlook for the country’s labor market, Bailey commented: “The relationship between the number of vacancies, which is an important measure of the tightness of the labor market, and the number of unemployed has decreased.”

Inflation in the UK was 10.1 percent in March. Food inflation, on the other hand, reached 19.1 percent, the highest level in 46 years. The Bank of England (BoE) raised the policy rate for the 12th consecutive time from 4.25 percent to 4.50 percent last week to bring inflation down to the 2 percent target level. (AA)