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(Sharecast News) - The head of the Bank of England called for further investment in infrastructure in the UK and said Bank was going to have a very "challenging job" on its hands when it came to dealing with inflation.
In an interview with the Yorkshire Post, Andrew Bailey said that investment in the UK had been "fairly weak" for some time now and that supporting digital, transport and climate infrastructure would help the economy grow.
The economic recovery had some distance to go but unemployment had likely already topped out, he added.
On inflation, Bailey said that Bank needed to prevent inflation from becoming embedded, which he said would "obviously be very damaging".
"Obviously I am concerned with inflation above target," he reportedly said.
"Unfortunately, if you look at our last forecast, it is going to go higher I am afraid. As the Bank of England governor I would prefer it not be there. But we are in very unusual times and what I would say is we have to manage our way through these times."
The strain on shipping was symptomatic of the "whole range of challenges that we are just going to have to deal with," he added.
Some of the "very big and unwanted price changes" which had occurred were reverting, but "still had quite a way to go", he reportedly went on to say.
"This has been an almost unprecedented set of events. They are not over yet, that we are learning. We have to manage our way through them, and we will do that."
Over the next few weeks, government was set make a host of major economic announcements, including the Budget, the three-year Comprehensive Spending Plan, the Integrated Rail Plan and the Levelling Up White Paper.
Also speaking on Saturday, but to the Telegraph, Monetary Policy Committee external member, Michael Saunders said that Bank Rate might rise "significantly" earlier than previously expected.
Saunders reportedly expressed concern that limited economic capacity and faster wage growth were driving an acceleration in prices which "could become more persistent unless monetary policy responds."
"I think it is appropriate that the markets have moved to pricing a significantly earlier path of tightening than they did previously."
As of 1042 BST, the pound was edging up by just 0.02% to 1.3618.
In parallel, the yield on the benchmark 10-year Gilt was advancing by four basis points to about 1.20%, having earlier hit a 52-week high at 1.222%.
16 Feb 2024 08:35
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