(Adds detail, context)
By David Milliken
LONDON, May 12 (Reuters) - Bank of England policymaker
Jonathan Haskel said on Wednesday that he was not too concerned
about the medium-term inflation outlook in Britain, but would
watch out for damage done by the pandemic to the country's
productive capacity.
Last week the BoE forecast consumer price inflation would
rise above 2.5% by the end of this year from 0.7% currently, but
then fall back to its 2% target over the course of next year.
"I am not that worried about inflation," Haskel said during
an online panel discussion hosted by the Tuck School of
Business, part of Dartmouth College in the United States.
The BoE is forecasting a rapid rebound for Britain's economy
as the economy reopens from COVID restrictions, and sees
short-term inflationary pressures from supply chain disruption,
higher oil prices and annual comparisons with 2020's depressed
prices.
"There will be lots of record figures of 'record this' and
'record that'. If you jumped down on the trampoline, you know,
the trampoline bounces back up again," Haskel said.
"What I think we've got to be much more aware of, and this
is important for inflation, is what the medium-term consequences
are going to be, and in particular if the economy has a lot of
scarring in it," he added.
The BoE revised down its estimate of 'scarring' last week as
it now sees less of a risk of long-term unemployment than
before, partly because of extended furlough payments.
But the central bank has warned that a slump in business
investment during the pandemic could limit companies' ability to
keep up with rising demand.
"If we have substantial impairment of our supply-side
capacity and we run the economy too hot ... then we are in
trouble," Haskel said.
(Reporting by David Milliken. Editing by Andrew MacAskill)