Bank of England Governor Andrew Bailey says the central bank can tolerate inflation rising above its 2% target, arguing that reacting too early to inflation concerns can create unwanted market and economic volatility. Bailey made the remarks in an address in Reykjavik, Iceland, according to reporting from The Independent and the Belfast Telegraph. He indicated that the timing of policy response matters: if the Bank tightens or changes course before inflation pressures are clearly established, the result may be instability rather than improvement. The comments are framed as part of the Bank’s approach to managing inflation over time rather than targeting each short-term movement immediately. The outlets report that Bailey’s message emphasizes patience and careful assessment of inflation dynamics, suggesting that temporary overshoots of the 2% objective may not automatically trigger an immediate policy response.
Bank of England governor says inflation may run above 2% target
Bank of England Governor Andrew Bailey says the central bank can tolerate inflation rising above its 2% target, arguing that reacting too early to inflation concerns can create unwanted market and eco...
- Andrew Bailey says the Bank of England can tolerate inflation above its 2% target.
- Bailey makes the remarks in an address in Reykjavik, Iceland.
- He argues that reacting too early to inflation concerns can create undesirable volatility.
- The comments describe a policy approach focused on timing and assessment rather than immediate reaction to every inflation move.
Andrew Bailey told an audience in Reykjavik, Iceland, that reacting too early to inflation concerns ‘may generate undesirable volatility’.
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