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BOE's Bailey: Medium Term Expectations Don't Amount To De-Anchoring

UK

Initial headlines from BOE Governor Andrew Bailey speaking At Peterson Institute Event:

  • U.K. has more in common with euro area on CPI
  • Concerns about what's happening on food prices
  • Firms concerned about shortfall of migrant labour

Currently being quizzed on monetary policy and inflation:

  • In a period of unprecedented large shocks
  • Real income shock will cause slowdown in growth
  • Question is whether labour market will slow down
  • History shows energy prices revert to normal levels
  • Inflation target is a `critical anchor' for BOE
  • Target facing most severe test since BOE independence
  • Short run inflation expectations rising rapidly
  • Medium term expectations don't amount to de-anchoring
  • Walking a very tight line between inflation and output

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