The Bank of England policymaker Michael Saunders has said he wanted more information about the impact of the new Coronavirus variant - Omicron, before deciding how to vote this month. He said it might slow the British economy, however, it could also add to inflation pressures if it led to people spending more money on goods, when supply chains are already strained than on going out or on other services.
Saunders said, “At present, given the new Omicron Covid variant has only been detected quite recently, there could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy.”
The BoE upended bets by investors on a rate hike on November 4, when it said it wanted to wait for more data on whether the end of the government’s job-protecting furlough scheme had led to a jump in unemployment. Saunders said there did not appear to have been a big hit to the labour market and there are risks from delaying a rate hike too long because that could lead the labour market to tighten further and push up already high inflation expectations.
