BoE Governor Andrew Bailey told the parliament’s Treasury Committee that the “transitory developments” inflation should have “few direct implications for inflation over the medium term”. Though, policymakers are still “going to have to be looking at the entrails of the inflation evidence very carefully from now onwards.”
MPC member Michael Saunders also said, long term inflation is “likely to continue to be restrained for some time by spare capacity in the labour market, with relatively weak underlying wage growth and subdued service sector inflation”.
On the other hand, Chief Economist Andy Haldane emphasized, “the situation we need to avoid like the plague is one where inflation expectations adjust before we do, or where we wait for proof positive that effects on inflation are not transitory before acting.”
