MNI BRIEF: BOE Bailey: Inflation Rise Should Be Temporary

While UK inflation has risen faster than expected the increase was likely to be temporary, Bank of England Governor Andrew Bailey said Thursday. Base effects, a slower recovery in supply than demand and distortedly strong demands for goods as opposed to services, with the latter still hampered by social restrictions, were all cited by Bailey as reasons why inflation is likely to continue to pick-up near term but then decline again.

Bailey, delivering his annual Mansion House speech, warned of upside risks to inflation, if labour supply remained diminished or price expectations rose, and said that the Bank would "respond with the tools of monetary policy" if there was evidence of more persistent price pressures.