BOE Governor: "The Goal is Undoubtedly 'Inflation Control'"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Andrew Bailey, Governor of the Bank of England (BOE), stated that he is ready to raise interest rates to control inflation.

According to Bloomberg on the 12th (local time), Governor Bailey said, "The BOE's goal is to bring inflation back to the 2% target, and there is no doubt about that goal." He explained, "We want people to know that there are options for rate hikes beyond a 0.25 percentage point increase on the discussion table."

Inflation in the UK currently stands at 9.1% and is expected to exceed 11% by the end of this year. As UK inflation reached its highest level in 40 years, the BOE began raising interest rates to bring the base rate to the highest level since 2009. Since December last year, the BOE has raised rates five times, increasing the base rate from 0.1% to 1.25%. The market expects the BOE to raise rates by 0.5 percentage points at the Monetary Policy Committee meeting on the 4th of next month.

The report also interpreted Bailey's remarks as meaning that the BOE is prepared to risk slower growth or even trigger a recession to curb inflation.

Meanwhile, Governor Bailey denied responsibility for the BOE's high inflation caused by stimulus policies during the COVID era. He explained, "I do not agree with the idea that we stimulated domestic demand," adding, "What we experienced was a very large supply shock."

This content was produced with the assistance of AI translation services.