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.
“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.
