Bank of England’s Bailey: Public Confidence in 2% Inflation Target Is Crucial
Bailey Emphasizes Importance of Inflation Target and Public Trust
Governor Bailey’s Statement on Inflation
LONDON, June 2 (Reuters) - Bank of England Governor Andrew Bailey said on Tuesday that it was important to get inflation back to target and give households confidence about the central bank's ability to do so.
Discussion on the 2% Inflation Target
Asked if having inflation above 2% for most of the 2020s meant the BoE had to rethink its price-targeting framework, Bailey said: "We have to focus more on how we manage the path back to target, and ... ultimately get there because we've got to give the public confidence that the target is for real.
Rejecting a Higher Inflation Target
Bailey, speaking at his annual appearance before the House of Lords' Economic Affairs Committee, also said the answer to target misses was not to raise the inflation target to 3%.
Interest Rate Decisions and Market Response
He voted to keep interest rates unchanged at 3.75% in April, part of an 8-1 majority, and last week said higher market interest rates gave the BoE time to decide if it needs to raise rates in response to the inflation shock from the Iran war.
(Reporting by David Milliken; writing by Suban Abdulla and Muvija M)
