A top banker and policymaker of the Bank of England (BoE), Silvana Tenreyro, categorically declared on Monday that some inflation drivers in the UK economy were expected to remain short-lived and added that the apex bank’s monetary policy can do little to affect them.
A news report by Reuters quoted the top banker as saying that since August, the UK had had large upside news for near-term inflation from energy prices, an effect which should fade quickly.
He expatiated: “Effects of supply chain disruption should also be temporary but the speed of rotation back to normal is a key uncertainty.
“Balance of recent news on the economy is unlikely to have a large effect on the amount of tightening required over the next few years.
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“Domestic cost pressures will depend on the evolution of the labour market now that the furlough scheme has ended.
“My policy votes will aim to strike a balance between these different effects and risks”, Tenreyro added.
Reactions from the stock market, however, indicated these didn’t seem to be having a significant impact on the British pound’s performance against its major rivals.
According to market reports, as at the time of filing this report, the GBP/USD pair was virtually unchanged at 1.3752.
