Commenting on inflation and the economy, the Bank of England (BOE) Deputy Governor Ben Broadbent said on Thursday, “the appropriate response to inflation may be nothing.”
“High inflation rate likely to subside, sees good cases.”
“Inflation rise is temporary.”
“The extent of the rise in inflation has been surprising.
“Have to pay very close attention, parsing official data as best as it can.”
“That includes numbers in the labor market.”
“Quite a bit of the current rise in inflation is actually coming directly from the higher price of oil, something that is likely to fall away through the early part of 2022.”
“Not convinced that current inflation in retail good prices should mean higher inflation in 18-24 months ahead.”
“That is the horizon more relevant for monetary policy.”
“Good case that the UK supply-side problems will be temporary.”
“Behaviour of labor costs will for me be important in judging the appropriate stance for monetary policy, this won’t be straightforward.”
On Broadbent’s comments, GBP/USD found fresh bids near 1.3720, as it bounced back towards 1.3750.
The spot is now seen trading at 1.3742, up 0.22% on the day.