Deputy governor Ben Broadbent said getting inflation back to target could take longer than the 18 months to two years it took to become embedded.
Concerns are mounting that aggressive rate rises since the start of last year risk plunging advanced economies into recession, but central bankers at the Fed’s annual symposium made it clear the rate of inflation remained too high. In a panel discussion after the speech, Dr Broadbent acknowledged the policy risks.
In his speech, Dr Broadbent set out to explain how an imported cost shock became embedded into Britain’s domestic price-setting mechanisms. The original cause was a steep drop in national income caused by external events at a time of tight labour markets, he said, adding that Brexit probably added to labour market difficulties.
“The good news is that these import prices have now been subsiding for a while,” he said, noting that wholesale European gas prices had fallen since peaking almost a year ago, and manufacturing output prices had also declined. But it would probably take longer for those factors to unwind than it did for them to emerge, he added.Dr Broadbent also said governments should learn from the inflation shock not to let trade become over-concentrated in the future, as they did with Russian gas.“The argument that governments have a role to play in addressing the problem is surely reasonable when it comes to Europe’s pre-war reliance on Russian gas,” he said.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Deputy Liberal leader Sussan Ley spared preselection challenge after opponent blocked from runningOpposition leader Peter Dutton says he supports Ley along with other Liberals facing challenge, including Alex Hawke, Paul Fletcher and Melissa McIntosh
Read more »
Rumours of a Queensland coup are premature – but Palaszczuk’s popularity is waningThe deputy premier, Steven Miles, called speculation about a challenge ‘rumours and gossip’
Read more »
Police, war crimes investigators seek access to documents in Roberts-Smith caseThe Australian Federal Police and the Office of the Special Investigator want access to restricted documents from Ben Roberts-Smith’s multimillion-dollar case.
Read more »
Police, war crimes investigators seek access to documents in Roberts-Smith caseThe Australian Federal Police and the Office of the Special Investigator want access to restricted documents from Ben Roberts-Smith’s multimillion-dollar case.
Read more »
Police, war crimes investigators seek access to documents in Roberts-Smith caseThe Australian Federal Police and the Office of the Special Investigator want access to restricted documents from Ben Roberts-Smith’s multimillion-dollar case.
Read more »
Vunivalu gets another shot as Jones names settled Wallabies side to meet FranceSuliasi Vunivalu and Ben Donaldson will get the chance to justify their World Cup selections after being named for the Wallabies against France.
Read more »