Bank of England (BoE) chief economist Andy Haldane warned inflation could rise by more than expected as progress on Covid-19 vaccines and huge amounts of stimulus increased chances of a swift economic bounce-back. Speaking at a University College London webinar, Haldane said, “As the economic recovery gathers pace next year, it will be important central banks remain squarely focused on their core medium-term price stability mandates.”
The BoE's nine-member Monetary Policy Committee has stressed that it will not be in a hurry to tighten monetary policy, saying instead, it first wanted to see clear evidence of “significant progress” to hitting its 2 per cent inflation target sustainably. Haldane said recent news of progress with the development of Covid-19 vaccines “offers some economic light at the end of the long, dark tunnel of this year” and there could be a rapid economic recovery in Britain and other countries.
Haldane said, “Taken together with the huge amounts of policy stimulus provided this year, this will in my view leave risks to the economic outlook more evenly balanced than for sometime, including risks to inflation over the medium term.”
