Jonathan Haskel, a member of the Bank of England’s Monetary Policy Committee, said he is likely to vote to keep interest rates at 5.25% at the next meeting in August. In a speech at King’s College London on Monday, Haskel said that higher inflation is expected to last for some time. Haskel noted that there are “encouraging signs” that inflation is falling back towards the BoE’s 2% target.
However, he warned that this may only be temporary.
BoE’s Haskel suggests rate hold
He said that the UK’s wage-price system has been affected by a “sequence of enormous shocks over recent years.” This has led to a “tight and impaired” labour market, which will keep inflation above the target for a while.
Haskel’s comments come as policymakers consider how to control inflation without hurting economic growth. The ongoing challenges in the labour market, such as tight conditions and various shocks, show how complex the situation is for the Bank of England as it tries to balance monetary policy. His position on holding the rates steady reflects worries about the current economic conditions.
It also shows concern about the potential long-term impacts of a tight labour market on inflation.
