The Bank of England’s policymaker has warned that further interest rates “cannot be ruled out” and “difficult judgements” will have to be made to bring inflation down to 2%.
Jonathan Haskel an economist, who is an external member of the seven-person Monetary Policy Committee (MPC) wrote in The Scotsman “Things look better than a few months ago.
“Since October last year, inflation has fallen from 11.1% to 8.7%, and we expect it to be around 5% by the end of this year.
“But inflation remains much too high.”
He said that the bank understands higher interest rates will lead to higher mortgage rates and business loans and also extortionate food prices for many.
Haskel said, “We understand that will be difficult for some people and it’s an important consideration in our policy decisions.”
In May the bank raised interest rates for the 12th consecutive time in a row to 4.5% and it is expected it will rise further, he admitted it is getting harder for the MPC as there are no “similar experience from the recent past to draw on.”
Haskel added, “My own view is that it’s important we continue to lean against the risks of inflation momentum, and therefore that further increases in interest rates cannot be ruled out.”